More than half a million pounds will be paid in direct compensation, while a further £434,000 will go to help vulnerable customers via the British Gas Energy Trust.

According to energy regulator Ofgem between February 2011 and March 2013 British Gas staff in Sainsbury’s stores across the country and at the Westfield shopping centre in Shepherds Bush made “exaggerated savings claims” to potential customers, failing to compare tariffs on a like for like basis and skewing calculations to produce inaccurate savings estimations.

Staff also failed to disclose that British Gas was the supply partner for Sainsbury’s Energy.

In some cases staff told consumers outright that they would save money by switching, when in fact that was untrue.

The energy supplier – which became aware of the issue and reported it to Ofgem itself – will pay an average of £130 each to 4,300 customers.

This latest blow comes in the midst of a turbulent time in the energy market, through which the six largest suppliers have been hit with scandals and investigations. 

Jeremy Cryer, energy spokesperson at Gocompare.com, said: “£1m is a drop in the ocean to British Gas owner Centrica, which made a £2.7bn profit last year. However, this is another blow to public trust for the best known name in the UK energy industry at a time when energy companies are already facing an investigation by the Competition and Markets Authority.”

But Sarah Harrison, senior partner in charge of enforcement at Ofgem, applauded the Big Six supplier’s action to “tackle its sales failures”.

She said: “Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don’t, Ofgem will act.”