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British Gas ‘may have been overcharging customers for 5 years’

new british gas logoBritish Gas may have been overcharging millions of its residential customers for the past five years, potentially breaching industry rules, regulators have warned.

Ofgem has said that British Gas has paid £10 million into a trust for vulnerable customers in order to settle a heated debate surrounding its prices.

The donation is almost at the same level of the £10.5 million fee that SSE paid back in April following “prolonged and extensive” mis-selling on the doorsteps of the UK.

The Daily Telegraph reports that British Gas was expected to announce this donation at the end of last week, however, it was only revealed when sources contacted the newspaper.

Ofgem says …

According to Ofgem, during 2006 and 2011, British Gas failed to round down the ‘calorific value’ of its energy, a charge that refers to the heat or thermal energy in the gas used by a customer.

Ofgem asks companies to use just one decimal point when rounding down, but British Gas used four, it was found.

An Ofgem spokesman commented: “British Gas’s interpretation of the regulations meant that although customers didn’t pay for energy they did not receive, they paid more than regulations allow.”

However, the regulator noted that the impact the issue would have on customers is as of yet “unclear”.

It stated that British Gas could have altered the main unit price of gas and electricity in a bid to make up for the higher charge when it comes to calorific value. However, a spokesman for the company claimed that it would be impossible to tell.

British Gas says …

Last night (June 17th), the energy giant claimed it had done nothing wrong, and none of its customers had been affected.

When it came to the £10 million it has paid out, a British Gas spokesman suggested the company simply wanted to resolve the debate and move forward, as the legal fees were mounting up.

The company commented: “We are making this donation following clarification from Ofgem that, while we believe we were operating in line with the regulations, we accept there was an alternative interpretation.”

Energy market reshuffle

This comes ahead of another big reshuffle of the energy market this week, with Ofgem expected to propose ways to simplify the tariffs of the big six energy suppliers, making saving money on energy bills easier for households.

The energy regulator is also aiming to break the “stranglehold” of the big six, demanding that big suppliers provide wholesale power to their smaller rivals, and set out price plans two years ahead of time.

While the government and a number of consumer groups welcomed these measures, others claimed they do not go far enough against a backdrop of increasing public and political anger about high prices and the major role of the biggest suppliers.

Learn more

Ofgem fines SSE £10.5m for mis-selling

Ofgem ‘opening up the market’ to competition

 

  • El unhappy customer

    So what does this mean to us, the customers? Are we to get a refund? If not, why not?

    • KenKen1977

      british gas have not only overcharged their customers but committing fraud on their accounts I have been overcharged by them since 2009 have phoned them to say and been fobbed off I recently found out they have committed fraud on 1 of my accounts dated:(28th feb 2014 I have now changed energy supply for both ele.& gas british gas are thieves, liars, & fraudsters they are also bully boys for threatening customers young & old by cutting off their energy supply by going to court to get a warrant to brake into youre property ither youre in or not they came to my house & they had no warrant they asked me approx.:4 times to get in I refused them .no wonder they have Lost over five million customers in a 10 year period probably more & been fined for over six million pounds in the same 10 year period .british gas should be ashamed of themselves they are the rogue traders of the energy Industries & they are disgusting creatures.no wonder they can afford to pay their managing director over 3 million pounds every year by stealing & committing fraud from their customers,

  • jimmy 1984

    switch and teach them a lesson if 2 million switch it will hurt them more than any fines or bad publicity id recomend e on 5 tarrifs only always know where your at with them and great customer service

  • BoredOfTheWhining

    Insert ill informed, bad business, blind rage comment here…
    Same old pitiful whining from people who don’t have a clue how the market actually works! Energy is EXPENSIVE people! supply and demand means that it’ll never change, no matter what you’re ineptitude says! You want cheap gas and electricty? Start fracking and get on a gyroscopic bike because while the government taxes the rear end off all gas in teh North Sea and we’re stuck dealing with Russia, IT IS NOT GOING TO CHANGE!
    It’s simply pathetic to make wild claims like ‘I think they should give all profits to customers’ and ‘they should be non-profit organisations’. That is terrible logic and would never work. It is the profit and investment from outside which allows attempts (which we never hear about I add) to try and break our need on fossil fuels. BG invest billions and billions of £s in looking for other fuel sources like Liquid Nitrogen and nucular, but all we ever get reported to on is all this pointless negativity.

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