British Gas pays out £2.65m after overcharging switching customers

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Energy supplier British Gas has paid out £2.65m in refunds, compensation and redress after overcharging 94,211 customers switching to a new provider and wrongly imposing exit fees on thousands of households, regulator Ofgem has said.

Ofgem said Centrica-owned British Gas misinformed customers by issuing incorrect terms and conditions about exit fees, wrongly charged them to some customers and applied incorrect charges to others after their fixed deal came to an end.

The supplier wrongly charged 94,211 customers its more expensive standard variable rate tariff after they decided to switch to a new supplier, due to a system error.

These customers were overcharged by £782,450, according to Ofgem.

It also said British Gas wrongly informed 2.5 million customers that exit fees were chargeable during the 49-day period before their fixed deal expires and incorrectly charged exit fees totalling £64,968 to 1,698 fixed deal customers.