British Gas has agreed to pay £20m into a redress fund and compensate customers to settle an investigation by energy regulator Ofgem into the forced fitting of prepayment meters. The company was found to have "failed to meet the standards required" when installing the meters and breached licence conditions aimed at protecting vulnerable customers. Three years ago, it emerged that debt agents working for British Gas had broken into homes to fit prepayment meters. British Gas has apologised, and the total settlement package will cost the company up to £112m in payments, compensation, and writing off customers' debt.
In 2023, The Times revealed how agents working for Arvato Financial Solutions, on behalf of British Gas, forced their way into the home of a single father of three to install a prepayment meter. After establishing the property was unoccupied, an undercover reporter observed the agents work with a locksmith to break in and install the meter. The scandal was industry-wide: 40,000 customers had a prepayment meter installed without permission between 2022 and 2023. Suppliers including EDF, E.On, and Scottish Power have already agreed to pay compensation. Ofgem investigated and subsequently banned the practice of fitting prepayment meters without customers' permission in high-risk households.
Amber Chivers told the BBC that following a mix-up over her energy bill direct debit, workers on behalf of British Gas broke into her home and installed a prepayment meter. "It was a big shock and alarming that somebody had come into our private space, private home, without pre-notification or anything," she said. British Gas has since apologised to Amber. The regulator found that British Gas was first made aware of the issue in 2018 through an external review, and the problem was flagged again in an internal audit in 2021 - but the company did not suspend the practice until 2023.
The boss of British Gas owner Centrica, Chris O'Shea, apologised to those affected, saying: "What happened should never have happened." He added that when the problems emerged, the company "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." O'Shea said changes have been made and safeguards put in place to ensure customers get the standards they expect.
Ofgem boss Tim Jarvis said the company "fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM [prepayment meter] installed without consent." He told the BBC's Today programme that suppliers must go to court to get a warrant to install a meter without consent, and once they have a warrant they must follow Ofgem's rules, including a welfare check. Ofgem said customers due compensation would be contacted and do not need to take any action, but did not say how many people would be eligible.
Clare Moriarty, head of Citizens Advice, said: "Many of those affected were left without heat in the depths of winter because they couldn't afford to top up. Those people deserve real compensation." The settlement, she said, "helps deliver that and serves as a warning to energy suppliers not to put consumers at risk." She added: "Without proper support, struggling families can be left in really dangerous situations. Ofgem must ensure the closure of this investigation is a step forward, not the final word."
Prepayment meters require customers to pay for energy use in advance, either through accounts or by adding credit to a card. Strict rules prevent suppliers moving an at-risk customer onto a prepayment meter if they are struggling to pay. Problems arise when residents have no credit left and no money to top up, leaving them unable to cook or heat their homes.