The fine comes as a warning from Ofgem to all energy companies to maintain standards about complaint handling and to "treat customers fairly.”
After an investigation which started in June last year, Ofgem found that British Gas had breached regulations by failing to re-open investigations when customers had indicated that the issue had not been resolved.
British Gas failed to provide dissatisfied customers with a redress service provided by the Energy Ombudsman. They also failed to put in any correct procedures when dealing with small businesses specifically.
Ofgem is also currently investigating Npower and EDF Energy for complaint handling. Earlier this month, British Gas was fined a further £1 million for mis-selling products to consumers.
Scottish Power, EDF Energy, Npower and Scottish and Southern Energy are all currently being investigated for mis-selling as well.
Sarah Harrison, Ofgem's Senior Partner for Sustainable Development, said:
"Today's finding highlights basic failures in British Gas' customer service, particularly in dealing with some of its small business customers, and shows Ofgem's commitment to use its powers to ensure suppliers treat customers fairly and transparently.
"We warned the industry in March that we would be backing up our plans to reform the retail market with a tough approach to enforcement. This £2.5 million fine against British Gas, and the other £10 million of fines imposed on the energy industry so far this year, sends a clear message to energy companies that they must abide by the rules,” Harrison continued.
Recently British Gas announced that they are to raise the price of gas by 18% and the price of electricity by 16%. This will increase the average household dual fuel bill by up to £200. If you are concerned about rising energy prices, you can compare price plans with the energy comparison service