British Gas has agreed to pay £20 million in compensation after a watchdog investigation revealed the energy giant forced prepayment meters into the homes of vulnerable customers without proper consent. The payment, which includes £15 million in direct redress and a £5 million fine, comes after a year-long probe by the energy regulator Ofgem. Sources confirm that the company installed over 2,000 prepayment meters under warrant between January 2022 and March 2023, often using court orders obtained without verifying customer circumstances.
Internal documents leaked to this desk show that agents were incentivised to hit quotas, leading to vulnerable customers, including those with mental health conditions and elderly residents, being disconnected from heating and electricity. Ofgem's executive director of markets told the press that the regulator is demanding a 'institutional overhaul' of British Gas's debt collection practices. 'The company failed its most vulnerable customers.
They must change the culture from the top,' he said. The £20 million settlement marks one of the largest penalties ever levied against a UK energy supplier. Campaigners argue that the fine is a fraction of British Gas's parent company Centrica's £3.
6 billion annual profit. A former British Gas employee, speaking on condition of anonymity, told me that the targets were 'impossible to meet without breaking the rules'. The scandal has reignited calls for a ban on forced prepayment meters, with the Labour Party pledging to outlaw the practice if elected.
British Gas's chief executive issued a statement apologising for 'unacceptable' failings but stopped short of admitting systematic wrongdoing. The money will be distributed to affected customers via automatic payments, but many will remain sceptical. As one victim said: 'They took my gas and now they give back what?
They should be naming the board members who signed off on this.' The watchdog has given British Gas 90 days to implement reforms, including an independent ombudsman to oversee future warrant applications. Failure to comply could result in further sanctions, including a possible referral to the Competition and Markets Authority.
The question remains: who will pay for the institutional overhaul?
