Green Star Energy has paid out £679,283 in compensation and to the customer redress fund for mis-selling and not issuing annual statements.
Ofgem said the energy company did not comply with its licence when price comparison website Utility Discount acted as a sales channel for the supplier without making it clear to its users.
It also failed to provide customers with annual statements between August 2014 and November 2017, which the supplier self-reported to Ofgem.
It paid compensation totalling more than £361,000 to 8,815 customers who were offered only Green Star Energy tariffs when visiting a page on Utility Discount’s price comparison page, which was accessible only via an online advert.
The regulator added throughout 25th January and 27th May 2018, the energy supplier did not ensure the price comparison site clearly informed prospective customers that it was acting as its representative.
It meant customers were unable to make an informed choice during this period and did not realise cheaper deals were available elsewhere.
The supply licence does not allow suppliers to use third parties acting as their representatives and must make sure their sales activity is transparent and does not mislead consumers.
Green Star Energy agreed to pay more than £151,000 to the consumer redress scheme for mis-selling to customers and £166,492 in recognition of its failings and the detriment caused to customers.
The supplier said it acknowledges the outcome of their investigation and its compliance with obligations under the supply licence.
A spokesperson added: “Our aim is to provide attractive products to energy consumers and world class customer service. As such, we have worked proactively and cooperatively with Ofgem to remedy this matter and have further made a contribution to the Energy Savings Trust that will benefit consumers.”