Victory for consumers as regulator makes British Gas pay out £2.65m over exit fees errors following MSE campaign

British Gas has paid out £2.65m in refunds, compensation and redress for wrongly informing customers about exit penalty fees and overcharging them. The regulator, Ofgem, kicked off a formal investigation into British Gas in July 2017 after a dossier of evidence of wrongdoing was presented by the UK’s biggest consumer website, MoneySavingExpert.com (MSE).  

The evidence also included similar complaints about two other big six energy suppliers – E.On and Npower – which resulted in apologies and redress at the end of last year.

Guy Anker, Deputy Editor at MoneySavingExpert.com, said: "Such behaviour by big suppliers totally undermines the concept of switching by falsely putting people off with the threat of false charges. Then to actually overcharge tens of thousands of people rubs salt into the wound. 

"And as switching is the key weapon to escape rip-off tariffs and save customers big money, suppliers who wrongly threaten these charges - and sometimes even have the nerve to levy them - are betraying hard-working families trying to save what could be a crucial few hundred pounds a year.

"The regulator's rules on switching are extremely clear - if you're in the last 49 days of your fix, you DON'T have to pay an exit fee and can switch to a different provider penalty-free. So it’s great to see that as a result of our campaign, Ofgem has now dealt with all three offenders, and we hope they and all other suppliers NEVER repeat this tactic."

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Notes to editors

How energy firms have got it wrong on exit fees

MSE has been campaigning on this since 2016 - here's a quick recap:

• Dec 2016. MSE revealed British Gas and Npower had wrongly told some customers they'd have to pay exit fees. British Gas's T&Cs for a collective fix wrongly stated customers would have to pay, without mentioning the 49-day penalty-free switching rule. It said it then "updated" its wording. Npower customers applying to switch within the last 49 days of their fix were sent confirmation emails telling them they'd have to pay exit fees – it blamed a system error and said it would change its emails.

• Jan 2017. MSE received fresh complaints from customers of Npower, with some still being sent emails saying they'd have to pay to switch despite leaving within the switching window. Npower blamed an "error" within its system. An E.on customer also reported being wrongly told she'd be charged when calling the provider – it apologised for what it called "an isolated incident".

• Mar 2017. MSE lodged a formal complaint with Ofgem and presented a dossier of evidence - we'd had further reports of Npower, British Gas and Extra Energy customers being given wrong info. Npower said it had stopped sending confirmation emails and was contacting customers who'd been given the wrong information, while British Gas and Extra Energy said customers wouldn't be charged.

• Jul 2017. Ofgem announced it was to investigate British Gas over its switching terms. Ofgem also said it was talking to Npower and E.on about exit fees but not investigating them.

• Sep 2017. MSE revealed that British Gas had charged a customer exit fees to switch tariff WITHIN the penalty-free switching window. British Gas later refunded the charge.

• Dec 2017. Npower and E.on apologised for misleading customers over exit fees after Ofgem looked into the issue. The regulator continued to investigate British Gas.

• May 2018. MSE revealed that Green Star Energy had wrongly told some customers nearing the end of their fix they'd have to pay exit fees of £30 per fuel to switch. It urgently reviewed its communications and confirmed nobody had been charged in error.