The energy industry regulator today launched an investigation into whether British Gas' switching terms breach its rules.
Ofgem today said a probe will look into whether the UK's biggest home energy supplier charged termination fees that were against its rules.
The watchdog's conditions say suppliers should not charge termination fees for any customer that switches energy supplier within the 49-day switching period before the expiry of a fixed-term contract.
The investigation follows concerns raised by consumer affairs website MoneySavingExpert (MSE). MSE gave the regulator a number of customer complaints alleging some Big Six suppliers wrongly suggested exit fees of up to £60 would be charged if customers switched supplier.
A spokesperson for British Gas said:
British Gas will co-operate fully with Ofgem to address the issues raised in today’s announcement.
Ofgem added that the opening of its investigation did not imply it had made any findings about non-compliance.
"We have reviewed the evidence received to date, after MoneySavingExpert raised this issue, and will be conducting a thorough investigation to establish whether British Gas failed to comply with the conditions of its licence," an Ofgem spokesperson said.
Martin Lewis, founder of MoneySavingExpert, said: “At least two firms – British Gas and Npower – have wrongly put that they would charge in their official literature. At best they are careless in the way they treat customers; at worst that they are trying to bully them into staying with misinformation. How can you trust firms who pump out such crap? I’m delighted that Ofgem is getting tough with them following our investigation."
The regulator has encouraged customers to switch suppliers and tariffs to avoid high prices and encourage competition in the industry, but so far consumer engagement has remained low.