Energy firm Iresa has been banned from accepting new customers until it starts to clear a backlog of complaints.
The Nottinghamshire-based firm is among scores of smaller suppliers taking on the big six energy firms. It regularly appears on price comparison tables.
Issues such as a 40-minute average wait for answering calls and concerns from vulnerable customers has led to a rare intervention by the regulator.
Iresa apologised and said it was improving its service.
A later emailed statement from the company said: “We are confident that our customers will see a noticeable improvement in our customer service response times and we apologise to customers who we have let down in the past.
“We are committed to improving our quality of service to deliver a much better customer experience.”
Iresa is already facing an investigation from energy regulator Ofgem into whether the firm treated customers fairly in its call-handling and complaints process.
Concerns included unexpected increases in direct debit demands, an inability for customers to log complaints, and the firm not having a system to identify and manage potentially vulnerable customers.
Ofgem is examining whether Iresa gave sufficient notice to customers facing financial difficulty that debt repayments were being taken out of their accounts.
Customers have complained of long waits on the phone or a lack of response to enquiries, with many venting their frustrations on social media.
Iresa has been banned from taking on new customers, increasing direct debits or asking for one-off payments for up to three months.
The company has been ordered, during that period, to extend call centre hours, to bring down average call waiting times to below five minutes, to respond to customer emails within five working days, to clear a backlog of consumer emails and log of customer complaints.
Failure to do so could potentially lead Ofgem to revoke Iresa’s licence to operate.