British Gas agrees £70m energy debt payoff and compensation over prepayment meter scandal
British Gas has agreed to a £20 million settlement and will compensate customers who had prepayment meters installed without their consent, regulator Ofgem said after an investigation.
The watchdog concluded that British Gas had failed in its duty to protect vulnerable customers by forcibly installing these energy meters in people’s homes in previous years.
The energy supplier is preparing to compensate those affected between 2018 and 2021, building on payments already made to affected customers in 2022-23.
As part of the deal, British Gas will also write off up to £70 million of energy debt from vulnerable customers.
Individuals who are required to pay compensation will be contacted by British Gas and they do not need to take any action.
Ofgem, which launched an investigation and changed the rules after the industry-wide practice was made public, said the five-year investigation into policies and procedures was one of the most complex in its history.
Tim Jarvis, the watchdog’s chief executive, said: “It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had prepayment meters installed without their consent, and it is right that they take action to put things right.
“Due to our action, customers will receive a significant package of compensation, compensation and debt cancellation.”
He added: “The installation of prepayment meters under warranty should only be a last resort, with stringent controls in place to ensure the debt is collected lawfully, proportionately and safely.”
Smart pay-as-you-go meters “were a positive choice for many customers,” according to the boss.
British Gas apologized to people affected by its actions and maintained it had not compulsorily installed prepayment meters since February 2023, when the issue first emerged.
Chris O’Shea, group chairman of Centrica, which owns British Gas, said: “What happened should never have happened and I am sorry for the prepaid customers affected.
“When we get things wrong, we fix them.
“When these issues arose in 2023, we apologized, immediately ceased operation, and took swift action to improve our processes and change the way we interact with indebted customers, particularly vulnerable customers.
“Over the last three years we have treated this issue with the seriousness it deserves, making changes to our practices and taking measures to ensure we deliver the standards our customers have a right to expect.”
Around 40,000 customers who had prepaid meters installed without their consent between 2022 and 2023 are currently receiving compensation from suppliers including EDF, E.On and Scottish Power.
