Utilita ordered to pay £560,000 for blocking customer switching

Utilita has been ordered to pay £560,000 to a debt charity and customers by Ofgem after it was found to have wrongly blocked 40,000 customers from switching.

The prepay supplier will pay a total of £450,000 to debt charity Step Change, with £110,000 set to be refunded to any customers who financially lost out after being prevented from changing supplier.

Between June 2010 and May 2015 Utilita wrongly stopped customers from switching away, and they were blocked in a variety of ways, including blocking those on fixed term contracts.

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

The supplier has now made changes to its processes to ensure there are no barriers to switching.

Ofgem’s senior partner with responsibility for enforcement Anthony Pygram 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. Utilita acknowledges its failure and is rightly looking to refund customers left out of pocket.”

The regulator added that Utilita had co-operated well throughout the investigation and this was reflected in the penalty issued.

Responding to the penalty, Utilita has apologised “unreservedly” to those customers whom we wrongly prevented from switching supplier.

In a statement, the company added: “Most customers impacted were only affected for a part of the period. Of those customers affected, under 10 per cent were left out of pocket. We will be contacting those customers as quickly as we can to rectify this.

“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.”