GREEN Star Energy has been ordered to pay £350,000 in compensation to 1,829 renters after they were wrongly locked into expensive energy deals.
Affected customers will received £60 redress from the energy firm after it failed to update its records and issue welcome packs to users.
While a further £240,260 will be split between customers who were worst affected.
The compensation will be automatically added as credit to customers' accounts if they're still with the firm.
Those who have since switched provider or moved house and believe they may have been affected are being urged to contact the energy firm to discuss getting their share of the payout.
The problem, which affects private tenants who used a third party comparison site called Tenant Shop to switch energy supplier, was detected in December last year.
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The issue meant some customers were given login details to access online accounts and potentially switch to a cheaper tariff with other providers.
It also impacted new renters moving into properties that were already supplied by Green Star Energy after users had switched via Tenant Shop.
These customers were left unable to speak to customers services because their details didn't match up with the former tenants' information held on file.
Energy watchdog Ofgem decided to take action over the firm's failure to deal with the issue appropriately, such as not self-reporting the matter to the watchdog.
But Ofgem says it won't be taking formal enforcement action.
A spokesperson for Green Star Energy 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."
Since May, energy firms have been ordered to pay customers up to £300 in compensation if something goes wrong when switching suppliers.
The new rules come as it's been revealed that 12million homes are owed £200 from their energy supplier.
Here's how to compare and cut your gas and electricity bills by more than £300 a year.
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