Energy switching ban leaves Utilita with fine

Pre-payment energy provider Utilita has been hit with a £560,000 penalty after wrongly blocking customers from switching supplier.

Regulator Ofgem found the company had blocked 40,000 customers from moving to other suppliers.

Refunds totalling £110,000 will be paid to customers who lost out financially as a result.

Utilita has apologised and will pay the rest of the penalty to debt charity StepChange,

Ofgem described the actions of Utilita as "unacceptable" and said that the ability for customers to switch was fundamental to a well-functioning energy market.

The regulator found customers were blocked in various ways between June 2010 and May 2015, such as automatically blocking those on fixed-term contracts.

The company also failed to write to customers to explain why their switch had been blocked and what action they could take to resolve any issues.

A spokeswoman for Utilita said: "We would like to apologise unreservedly to those customers whom we wrongly prevented from switching supplier."

She said that only 10% of customers affected were left out of pocket.

"We will be contacting those customers as quickly as we can to rectify this," she said.

"Our customers are vitally important to us and we have taken quick and decisive action to update and improve our switching procedures. None of the issues investigated remain a problem and all our transfer processes are now compliant."