Renewable energy supplier Green Star has been slapped with a £350,000 penalty after it failed to update its records and issue new tenants with welcome packs, meaning they were unable to access their accounts or move to cheaper tariffs.
Ofgem discovered that the records of 1,829 customers on the private rental market were not updated after a change of tenancy. That meant these customers were stranded on deemed contracts, an expensive default tariff for customers who have just moved into a property, before they have negotiated a new tariff or supplier.
Tenants who tried to contact the supplier to switch had difficulty gaining access to their accounts.
Green Star was reportedly aware of these issues but failed to remedy them or self-report the faults to Ofgem.
As a result, the energy market regulator has hit the supplier with a £350,000 fine. Green Star will pay each affected customer £60 in compensation as well as make a £240,260 voluntary contribution to the energy redress fund.
The Energy Redress Scheme supports charitable initiatives that help vulnerable energy customers. It’s funded by contributions suppliers make following compliance and enforcement action by Ofgem.
Ofgem decided not to take formal enforcement action after Green Star demonstrated it had reviewed its systems and addressed any failings.
A Green Star Energy spokesperson said: “We deeply regret any inconvenience caused as a result of the historic issues in the processing of Tenancy Shop customers’ change of tenancy.
“Although we are disappointed not to have met the high standards we set ourselves in this instance, we are pleased to have worked with Ofgem to resolve this matter and to provide redress to our affected customers.”
This is the second time the challenger supplier has been fined in the last year. Last September Green Star was fined more than £600,000 for mis-selling and failing to issue customers annual statements.
However, Ofgem had enough confidence in Green Star to assign it the 10,000 customers left stranded by the failure of Future Energy in January.