A business energy supplier has been ordered to pay £980,000 for failing in customer service following an investigation.

Ofgem said BES didn’t properly explain important contract terms to customers, including possible termination fees if their contracts ended early.

It added the energy company also wrongly blocked some customers from switching to different suppliers and its complaints handling process was “inadequate” between June 2010 and July 2015.

“Since the majority of BES’ customers signed up to four-or five-year contracts, these omissions were particularly serious,” the regulator said.

BES has agreed to repay termination fees and any standing charges to affected customers and will allow those customers who previously contacted the company to end their contracts without paying the exit charge.

It has also agreed to compensate those customers who paid higher bills by not being permitted to switch suppliers.

More than £300,000 are expected to be returned to customers while £670,000 will be given to Business Debtline.

Anthony Pygram, Ofgem Senior Partner in charge of enforcement said: “BES failed to treat its customers fairly and did not provide them with key information when signing up for contracts.

“BES’ customers were unable to make fully informed choices about their energy supply and many were signed up to four or five year contracts without realistic ways to exit.”

The reulator added the supplier has since improved its processes and co-operated throughout the investigation.

Joel Chapman, Head of Regulation & Compliance at BES said: “Over the last 18 months we have invested heavily in additional staff, processes and IT systems to ensure we not only remain compliant but deliver a first class level of service.”