Ofgem ruled that the company had failed to re-open complaints when customers said they had not been resolved.
It added that British Gas had not provided customers with key details about help they could get from the energy ombudsman.
However, the energy company described the ruling as "totally disproportionate" to the issue.
'Basic failures' Ofgem also said the energy provider had failed to put in place proper complaint procedures for small business.
"Today's finding highlights basic failures in British Gas' customer service, particularly in dealing with some of its small business customers," said Sarah Harrison at Ofgem.
"We warned the industry in March that we would be backing up our plans to reform the retail market with a tough approach to enforcement."
But British Gas said the breach was minor when it had 16 million accounts, and its complaints handling procedures had recently been praised by watchdog Consumer Focus.
"However, specifically for our micro-business customers, we acknowledge our service fell short of what they should expect from British Gas, for which we apologise," a spokesman said.
"We knew we had an issue here which is why we flagged it to Ofgem. After a £4m investment, we are now confident we meet all of our regulatory requirements".
Ofgem said it was also investigating Npower and EDF Energy for they way they handle customer complaints, and Scottish Power, Scottish and Southern Energy, EDF Energy and Npower for mis-selling.
It added it was looking into potentially misleading marketing at Scottish Power, and the difference between the company's standard credit and direct debit tariffs.
Home » World News » British Gas fined £2.5m for complaint handling 27 July 2011 Last updated at 07:38 GMT
British Gas fined £2.5m for complaint handling 27 July 2011 Last updated at 07:38 GMT
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