British Gas Pays £20M Over Forced Prepayment Meter Scandal
British Gas has agreed to pay £20 million into a customer redress fund, BBC Business reported Friday, settling a regulatory probe into its forced installation of prepayment meters in vulnerable households.
Regulator Finds Serious Licence Breaches
UK energy watchdog Ofgem determined that British Gas prepayment meter practices fell below required standards. The regulator concluded the supplier violated specific licence conditions designed to shield customers in vulnerable circumstances. Ofgem chief Tim Jarvis stated the company “fell short in its treatment of an unacceptable number of vulnerable customers,” according to the BBC. He stressed that warrant-based installations must always be a last resort. Rigorous welfare checks and lawful debt recovery processes are required under Ofgem’s rules before any forced entry is permitted.
A Scandal Years in the Making
Ofgem’s investigation revealed that British Gas was first alerted to problems with its meter installation practices in 2018 via an external review. An internal audit in 2021 flagged the same concerns. Despite repeated warnings, the company did not halt the practice until 2023. That year, a Times newspaper investigation exposed how agents working for a third-party contractor, on behalf of British Gas, had broken into the home of a vulnerable single father to fit a prepayment meter. The scandal extended across the industry. Approximately 40,000 customers had meters installed without consent between 2022 and 2023. Rivals including EDF, E.On and Scottish Power had previously reached their own compensation agreements with the regulator. Ofgem subsequently banned forced installations in high-risk households entirely.
What the Full Settlement Covers
The total cost to British Gas owner Centrica reaches up to £112 million. The package includes direct customer compensation for meter fittings going back to 2018, covering a period predating earlier settlements. It also includes writing off up to £70 million of energy debt owed by vulnerable customers. British Gas will complete a £22.4 million voluntary support scheme for prepayment customers it launched in 2023. The company will additionally create a dedicated Vulnerable Customers Debt Advisory Panel. Chief Executive Chris O’Shea apologised unreservedly, acknowledging the company moved too slowly to fix known failures. Affected customers will be contacted directly by British Gas and do not need to initiate any claims themselves.
Calls for Wider Reform
Consumer groups welcomed the settlement but warned it should not be the final word. Clare Moriarty, head of Citizens Advice, noted many affected customers lost home heating mid-winter because they could not afford to top up meters. Simon Francis of the End Fuel Poverty Coalition said the confirmed timeline of known failings was “truly shocking.” He called on lawmakers to use the forthcoming Energy Independence Bill to permanently end forced prepayment meter installations and overhaul the warrant process.
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