British Gas Agrees to £20M Settlement Over Forced Prepayment Meter Installations

British Gas has agreed to pay £20 million into a customer redress fund, BBC Business reported Friday, settling a regulatory investigation into the unlawful forced fitting of prepayment meters in the homes of vulnerable people.

A Scandal Years in the Making

Energy regulator Ofgem confirmed the settlement following a probe into widespread industry misconduct. Beyond the £20M redress payment, British Gas owner Centrica will write off up to £70M in outstanding energy debt owed by vulnerable customers. Some of that written-off debt may also serve as direct compensation.

The core of the scandal involved debt agents, contracted through Arvato Financial Solutions, breaking into customers’ homes alongside locksmiths to forcibly install prepayment meters. A 2023 Times investigation first exposed the practice publicly, using an undercover reporter to document agents entering an unoccupied property belonging to a single father of three.

How the Problem Went Unaddressed

The Ofgem investigation found British Gas had prior warning of the misconduct. An external review flagged the issue as far back as 2018. An internal audit raised concerns again in 2021. The company did not halt the practice until 2023, when public pressure became impossible to ignore.

Ofgem chief executive Tim Jarvis said British Gas had fallen well short of its obligations to vulnerable customers. He described forced prepayment meter installation under warrant as a last resort requiring rigorous safeguards, not routine debt recovery.

Industry-Wide Fallout

The scandal extended beyond one company. Roughly 40,000 customers across the energy sector had prepayment meters installed without their consent between 2022 and 2023. Rivals including EDF, E.On and Scottish Power had already reached separate compensation agreements with the regulator before Friday’s announcement.

Centrica Chief Offers Apology

Centrica chief executive Chris O’Shea issued a public apology, acknowledging the situation should never have occurred. He said the company halted the practice immediately upon becoming aware and has since overhauled its processes for dealing with customers in debt, particularly those in vulnerable circumstances.

Consumer advocates were less conciliatory. Simon Francis, coordinator of the End Fuel Poverty Coalition, called the findings shocking and urged lawmakers to legislate against forced prepayment installations through the forthcoming Energy Independence Bill. He argued structural reform of the warrant process is essential to prevent a repeat.

Ofgem confirmed that eligible customers would be contacted directly and do not need to initiate a claim themselves.

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