The energy regulator is investigating British Gas amid an accusation that suppliers may have tried to put customers off switching accounts by threatening a fee.
Ofgem said it was examining whether British Gas had breached the terms of its licence following a complaint by a consumer website.
MoneySavingExpert.com wrote to the watchdog in March to claim “many customers” on fixed term contracts with major suppliers had been “wrongly told they would have to pay to switch” in official correspondence.
Its founder, Martin Lewis, explained: “The rules are very plain. You cannot and should not be charged exit penalties if your switchover takes place within the last 49 days of your energy fix.”
British Gas said it would co-operate fully with the inquiry.
The issue is another potential hurdle for an industry that has been under political and regulatory siege for years.
It was announced earlier this week that so-called Big Six suppliers were facing the prospect of a “safeguard tariff” to help protect vulnerable customers – in addition to caps on pre-payment meters.
There were also further plans to help get more customers switching accounts but the proposals fell short of a pre-election pledge by the Conservatives to cap the most expensive standard tariffs currently paid by 70% of UK households.
Such a move would have shaved £100 annually from those bills per customer. The measure was not in the Queen’s Speech.
The sector had argued the proposed cap was anti-competitive and would have damaged the industry’s ability to invest in crucial infrastructure improvements.
Source: SKY News