British Gas Pays £20M to Settle Forced Prepayment Meter Scandal
BBC Business reported Friday that British Gas has agreed to pay £20m into a customer redress fund to resolve a regulatory probe into the unlawful forced fitting of prepayment meters in vulnerable households.
Energy regulator Ofgem found that Britain’s largest household energy supplier failed to meet required standards and breached licence conditions specifically designed to safeguard at-risk customers.
A Scandal Years in the Making
The total cost of the settlement reaches up to £112m when compensation payments and debt write-offs are included. That figure encompasses writing off up to £70m of vulnerable customers’ energy debt, completing a previously announced £22.4m support package, and paying additional compensation to affected customers stretching back to 2018.
Ofgem’s investigation established that British Gas was first alerted to problems with its prepayment meter practices in 2018 through an external review. An internal audit in 2021 raised the issue again. The company did not halt the practice until 2023.
Also Read: What Is Ofgem and How Does It Regulate UK Energy Suppliers?
How the Story Broke
The prepayment meter scandal became public in 2023 after the Times published an investigation showing agents working on behalf of British Gas had forced entry into a single father’s home using a locksmith. An undercover reporter witnessed the incident firsthand.
The scandal extended across the entire industry. Roughly 40,000 customers had prepayment meters installed without their consent between 2022 and 2023. Rival suppliers including EDF, E.On and Scottish Power had already agreed to compensation payments before this settlement was reached.
Also Read: UK Energy Bills and What Prepayment Meters Mean for Consumers
Centrica Boss Apologises, Campaigners Push for Reform
Centrica chief executive Chris O’Shea said publicly that what happened “should never have happened.” He added that the company acted swiftly once the problems surfaced and has since reformed its customer engagement processes.
Ofgem director Tim Jarvis said prepayment meters installed under warrant must remain a last resort. He stressed that suppliers are obligated to conduct welfare checks before proceeding, even when a court order has been granted.
Campaigners are not satisfied. Simon Francis of the End Fuel Poverty Coalition said the findings confirmed British Gas had long known about the failures and still delayed acting. Francis called on lawmakers to include measures banning forced prepayment meter installations in the forthcoming Energy Independence Bill.
Affected customers do not need to take action. Ofgem said those eligible for compensation will be contacted directly.
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