Ofgem fines suppliers for mistreating customers

Ofgem has fined ScottishPower and npower penalties of £200,000 each after some 9,000 direct debit customers were unfairly stopped from switching to a different gas or electricity supplier last year.

The regulator's chairman, Sir John Mogg, said: "Our decision will demonstrate to all energy companies that we will not tolerate any bad practices that damage customer confidence in the competitive energy markets.

"Consumers can save a lot of money by switching supplier. We do not want to see anyone put off exercising their right to choose a new supplier."

The penalties were first proposed in December 2003. They will be paid into the Government Consolidated Fund, with affected customers not receiving any money.

Energywatch, the independent gas and electricity consumer watchdog, has called on the two firms to make an ex-gratia payment of £50 to each customer whose request to transfer was blocked.

This is the third time Ofgem has imposed financial penalties. It fined London Electricity £2m in November 2002 for mis-selling and fined British Gas Trading a total of £200,000 in June 2003 for incorrect objections.