Green Star Energy is to pay £350,000 after more than 1,800 of its customers were left unable to access their accounts and cheaper tariffs.
The supplier, launched in 2013 as a subsidiary of Hudson Energy Supply UK, part of Just Energy Group, was made aware of the issues but failed to adequately address the failings or report them to Ofgem.
Ofgem says it was made aware that records of customers in the private rental market had not been updated on Green Star Energy’s systems after a change of tenancy.
The customers did not receive welcome packs including account details. This left tenants on deemed contracts – usually the most expensive tariff – unable to access potential savings by switching tariff and/or supplier.
Furthermore those who tried to contact Green Star may not have been able to clear data protection to access their accounts and check the progress on their enquiries, the regulator said.
Ofgem raised the concerns with the supplier and Green Star has since engaged with the regulator and has identified and addressed the problems.
As a consequence of its failings, Green Star will pay each affected customer £60, a total of £109,740 in compensation, and make a further voluntary contribution of £240,260 to the energy redress fund.
Ofgem added that it has decided not to take formal enforcement action, taking into account the steps the company has taken to address its failings and the redress it has agreed to pay.
A spokesperson for Green Star Energy said:“We are pleased to have reached an agreement with Ofgem to resolve any outstanding issues regarding the processing of Tenancy Shop customers’ change of tenancy.
“Green Star Energy has committed to a voluntary redress that includes compensating customers for any inconvenience that they may have experienced.
“We are contacting all affected customers to let them know that they will receive a £60 goodwill payment.
“If, after our best efforts, we are unable to make contact, any funds that remain unpaid after three months will be redirected to Ofgem’s energy industry voluntary redress scheme.
“Every customer experience is important to us, and we are pleased the matter is now behind us.
“Ofgem’s compliance engagement closure document outlines the details upon which we have agreed to bring final resolution to this administrative matter.”
Responding to the news Chris Green, head of commercial at the Energy Ombudsman, said: “We are encouraged to see that Green Star Energy has now reviewed its systems and addressed the shortcomings that led to this particular issue.
“We are in regular contact with Green Star Energy and are working closely with them to help them make improvements to their customer service and complaint handling more generally.
“In light of Ofgem’s announcement today, we are keen to continue our positive working relationship with Green Star Energy to help them avoid failings like this in the future.”
Richard Neudegg, head of regulation at Uswitch.com, said: “Renters are often on the most expensive tariffs partly because of misconceptions that they don’t have a right to switch.
“It’s incredibly concerning that nearly 2,000 renters could have been stuck on a more expensive tariff because critical information about cheaper deals and switching, required by the regulator, wasn’t provided by their own supplier.
“Uswitch research shows that one in ten renters has had to fork out an average of £100 to pay for a previous tenant’s energy use.
“More concerningly, a staggering 40 per cent of renters have never switched supplier – meaning they have almost certainly been paying far more than they need to.
“Green Star Energy should have done better to protect its own customers, especially after they were told there was a problem.
“This sends yet another signal to suppliers that they need to do right by their customers every single time.”
Peter Earl, head of energy at comparethemarket.com, said: “Blocking people from accessing cheaper deals simply isn’t good enough and falls well below the minimum standards required.
“Renters are often more disengaged with their energy supplier than homeowners, so getting the basics right is crucial for generating engagement and maintaining confidence in the energy market.
“Hopefully this fine will act as a warning to other suppliers and help improve customer service.”
In September last year, Green Star paid £679,283 in compensation and payments to the redress fund after mis-selling to customers and failing to provide annual statements.
Ofgem said the company offered tariffs to 8,815 customers when visiting a bespoke page on price comparison website Utility Discount, which was accessible only via an online advert.