UK power supplier Utilita Energy has to pay a £560,000 penalty for blocking customers from switching to other firms.
Ofgem found the company banned 40,000 customers from moving to other suppliers between June 2010 and May 2015.
It said they were “incorrectly” blocked those customers on fixed term contracts and also failed to write to them to explain why their switch had been blocked and what action they could take to resolve any issues.
The firm will pay £110,000 to those customers who lost out financially as a result while the rest will be given to charity StepChange.
Anthony Pygram, Ofgem’s Senior Partner with responsibility for enforcement said: “The ability to switch suppliers is important for customers and fundamental to a well-functioning energy market. Utilita’s prolonged failure to allow many customers to switch was unacceptable.”
In a statement Utilita apologises “unreservedly to those customers whom we wrongly prevented from switching supplier”.
A spokesperson added: “Most customers impacted were only affected for a part of the period. Of those customers affected, under 10% were left out of pocket. We will be contacting those customers as quickly as we can to rectify this.
“We have been completely transparent and co-operated fully with the investigation from the start. Ofgem has acknowledged this.”