Customers to get £20m payout after power agency compelled pre-pay metres on properties

Watchdog Ofgem found that British Gas failed to protect vulnerable customers by forcibly fitting the energy meters into people’s homes in previous years

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British Gas has agreed to a £20million payout and to compensate customers who had a prepayment meter installed without their permission, regulator Ofgem has said following an investigation.

The watchdog found that British Gas failed to protect vulnerable customers by forcibly fitting the energy meters into people’s homes in previous years.

The energy supplier will compensate customers who were affected in 2018-21, on top of payments that have already been made to those affected in 2022-23.

British Gas will also write off up to £70million of energy debt for vulnerable customers as part of the agreement. Those who are due compensation will be contacted by British Gas and do not need to take action.

Ofgem, which launched an investigation and changed the rules after the industry-wide practice was publicly exposed, said its probe into five-year long 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.

“Because of our action customers will receive a substantial package of redress, compensation and debt write off.”

He added: “The installation of prepayment meters under warrant should only be a last resort, with rigorous checks to ensure debt is recovered lawfully, proportionately and safely.”

Smart pay as you go meters were a “positive choice for many customers” instead, according to the boss.

British Gas apologised to people affected by its actions and asserted that 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 we get things wrong, we make them right. 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.

“Over the last three years, we have treated this matter with the seriousness it deserves and have made changes to our practices and put safeguards in place to ensure we deliver the standards our customers have every right to expect.”

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