British Gas Pays £20M to Settle Forced Prepayment Meter Scandal
British Gas has agreed to pay £20M into a customer redress fund after UK energy regulator Ofgem found the supplier failed to protect vulnerable customers, BBC Business reported Friday. The total cost of the full settlement package reaches up to £112M when compensation payments and debt write-offs are included.
Ofgem Finds Repeated Licence Breaches
Ofgem concluded that British Gas fell short of the standards required when installing prepayment meters in customer homes. The regulator found the company breached specific licence conditions designed to safeguard people in vulnerable circumstances. Ofgem Director General Tim Jarvis said the company left an unacceptable number of vulnerable customers without proper consent procedures before meter installation. He stressed that fitting a prepayment meter under warrant should always be a measure of last resort. Welfare checks and strict procedural rules must be followed once a court warrant is obtained, Jarvis said.
A Scandal Years in the Making
The forced prepayment meter issue first drew public attention in 2023. A Times investigation revealed that debt agents contracted by British Gas had broken into a single father’s home and installed a meter while the property was empty. The broader industry problem affected roughly 40,000 customers between 2022 and 2023. Critically, Ofgem found that British Gas had been alerted to the underlying issues as far back as 2018 through an external review. An internal audit in 2021 raised the same concerns. The company did not suspend the practice until after the 2023 media exposure. Other major suppliers including EDF, E.On, and Scottish Power had already agreed to compensation settlements before this ruling. Ofgem subsequently banned the practice of fitting prepayment meters without consent in high-risk households across the industry.
Settlement Details and Corporate Response
The full settlement covers several components. Customers who had meters fitted between 2018 and 2021 will receive compensation on top of payouts already made for the 2022 to 2023 period. Up to £70M of vulnerable customers’ energy debt will be written off. British Gas will also complete a £22.4M voluntary support package for prepayment customers it launched in 2023. A new Vulnerable Customers Debt Advisory Panel will be established within the company. Centrica Chief Executive Chris O’Shea apologised directly to affected customers and said the company moved immediately once the problems surfaced. Advocacy groups welcomed the settlement but pressed for further reform. The End Fuel Poverty Coalition called the findings “truly shocking” and urged lawmakers to use the forthcoming Energy Independence Bill to permanently end forced prepayment meter installations. Ofgem confirmed affected customers will be contacted directly and do not need to take any action to receive compensation.
