British Gas pays £20m over prepayment meter force-fitting scandal

British Gas will pay £20m into a redress fund and write off up to £70m in customer debt after an investigation found it forced prepayment meters into the homes of vulnerable customers without consent.

The settlement, announced by energy regulator Ofgem, is the largest ever imposed on a British energy supplier, more than four times the previous record of £26m paid by npower in 2015 ^[2]. The scandal involved the forced installation of prepayment meters on households that were not keeping up with their bills during the Russian gas crisis ^[2].

Ofgem's investigation found that British Gas was first made aware of the issue in 2018 but did not suspend the practice until 2023 ^[1]. Up to 40,000 customers had a prepayment meter installed without permission between 2022 and 2023 ^[1]. The regulator later banned the practice of fitting prepayment meters without customers' permission in high-risk households ^[1].

Tim Jarvis, Ofgem's chief executive, said British Gas "fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM installed without consent, and it's right that they've taken action to put things right" ^[2]. The £20m penalty will go into Ofgem's voluntary redress fund to compensate affected customers ^[2].

British Gas must also continue providing the remainder of a £22.4m voluntary assistance package it launched after the scandal emerged ^[2]. The supplier will have one year to determine the exact number of households due compensation ^[2].

Chris O'Shea, chief executive of Centrica, which owns British Gas, said: "What happened should never have happened, and I am sorry to the prepayment customers who were affected" ^[2]. He added that the company has made changes to its practices and put safeguards in place over the last three years ^[2].

Martin McCluskey, the minister for energy consumers, called the forced installations "an unacceptable national scandal" and said the government's energy market reforms would "help make sure injustices like these never happen again" ^[2].

The investigation found that most major energy suppliers had forced prepayment meters into homes due to unpaid energy debts ^[2]. A separate Ofgem investigation concluded that ScottishPower, EDF, E.ON, Octopus Energy, and several other suppliers had fallen short of the regulator's standards when fitting the meters ^[2]. Those suppliers collectively agreed last May to pay 40,000 households more than £18.6m in compensation and debt write-offs ^[2].

Ofgem temporarily banned the practice of forcing prepayment meters on households that missed repeated payments after the Times reported in early 2023 that debt agents working for British Gas had ignored signs of vulnerability ^[2]. The regulator later allowed suppliers to restart forced meter installations less than a year after the moratorium, though forced fittings in homes with young children or residents over 75 remain banned ^[2].