British Gas to pay £20m over forced prepayment meter installations

Vulnerable customers fitted with meters without consent to receive compensation and debt write-offs after Ofgem investigation.

An Ofgem investigation has found that British Gas fell short in its treatment of vulnerable customers, resulting in a £20 million settlement and a commitment to compensate those who had prepayment meters fitted in their homes without agreement.

Nikki Stopford, co-founder of Consumer Voice, said:

“Being forced onto a prepayment meter without consent can mean people are effectively cut off from energy altogether.

The regulator found that British Gas failed to protect vulnerable customers by forcibly fitting prepayment meters in previous years. The company will now compensate customers affected between 2018 and 2021, on top of payments already being made to those affected between 2022 and 2023. British Gas will also write off up to £70 million of energy debt for vulnerable customers as part of the settlement.”

Stopford added that the focus must now be on ensuring all affected customers are identified and compensated. “People shouldn’t assume this will happen automatically, especially if they’ve moved or switched supplier,” she said. “If you think this could apply to you, it’s worth contacting British Gas and asking the question.”

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How thousands were forced onto prepayment meters

The prepayment meter scandal first made headlines three years ago, at the peak of the cost of living crisis, when it emerged that energy suppliers were entering people’s homes to switch them onto prepayment meters without their agreement. The practice was paused following a public outcry and Ofgem launched an investigation.

Ofgem said its investigation into British Gas’s five-year policies and procedures had been one of the most complex in its history. Tim Jarvis, the watchdog’s chief executive, said: “It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a prepayment meter installed without consent, and it’s right that they’ve taken action to put things right.”

Some 40,000 customers who had a prepayment meter installed without permission between 2022 and 2023 are already receiving compensation from suppliers including EDF, E.On and Scottish Power.

Being forced onto a prepayment meter can effectively cut people off from energy altogether if they cannot afford to top up – a particularly serious consequence for those already struggling with rising costs.

British Gas admits failures and apologises

British Gas apologised to affected customers and said it has not been force-fitting prepayment meters since February 2023, when the issue was first exposed.

Chris O’Shea, group chief executive of British Gas owner Centrica, said: “What happened should never have happened, and I am sorry to the prepayment customers who were affected. When these issues came to light in 2023, we apologised, stopped the activity immediately and took rapid action to improve our processes and change how we engage with customers in debt, particularly those in vulnerable situations.”

Minister for energy consumers Martin McCluskey described the forced installations as an “unacceptable national scandal” and said British Gas must ensure “the victims see every penny of the compensation they are owed.”

Who will be compensated and what happens next

Customers due compensation will be contacted by British Gas and do not need to take immediate action. However, those who have moved home or switched supplier since the incidents may not be reached automatically and may wish to contact British Gas to check if they are eligible. 

Q&A: What should British Gas customers do now?

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