British Gas Pays £20M to Settle Prepayment Meter Scandal
British Gas has agreed to a £20 million redress fund and a broader compensation package to resolve a regulatory investigation, BBC Business reported Friday. The total settlement could reach £112 million when compensation payments and debt write-offs are included.
Regulator Finds Systemic Failures in the Prepayment Meter Scandal
Energy watchdog Ofgem concluded that British Gas fell short of required standards when fitting prepayment meters. The regulator found the supplier broke licence conditions specifically designed to shield customers in vulnerable circumstances. Ofgem chief Tim Jarvis said the company failed “an unacceptable number of vulnerable customers” who had meters installed without their consent. Jarvis stressed that warrant-based installations must always represent a last resort. Suppliers are required to obtain a court warrant and then complete a welfare check before proceeding.
How the Crisis Unfolded
The prepayment meter scandal first entered public view in 2023. Investigators discovered that agents from Arvato Financial Solutions, acting on British Gas’s behalf, had used locksmiths to force entry into homes and fit meters. One documented case involved a single father of three whose unoccupied property was broken into while an undercover reporter watched. Ofgem has since banned the practice of installing prepayment meters without consent in high-risk households. The scandal extended across the sector. Roughly 40,000 customers had meters fitted without permission between 2022 and 2023. Rival suppliers including EDF, E.On and Scottish Power have already reached separate compensation agreements.
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Warnings Were Ignored for Years
Ofgem’s investigation revealed that British Gas was first alerted to problems with its meter-fitting processes back in 2018 through an external review. An internal audit raised the same concerns again in 2021. Despite those warnings, the company did not suspend the practice until the scandal became public in 2023. Centrica chief executive Chris O’Shea apologised to affected customers. He said the company halted the activity immediately once problems surfaced and has since overhauled its processes for handling customers in debt.
What Customers Can Expect
The full settlement package covers several areas. Compensation will be paid to customers who had meters forcibly installed between 2018 and 2021, adding to payments already made for the 2022-2023 period. British Gas will also write off up to £70 million of vulnerable customers’ outstanding energy debt. The company will complete the remaining portion of a £22.4 million voluntary support package launched in 2023. A new Vulnerable Customers Debt Advisory Panel will also be established internally. Citizens Advice chief Clare Moriarty welcomed the settlement but warned it must not be treated as the final word on protecting struggling families from dangerous situations.
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