British Gas Fined £20m for Forced Prepayment Meter Installations on Vulnerable Customers

British Gas has agreed to pay £20m into a redress fund and provide compensation to customers, concluding an energy regulator investigation into the forced fitting of prepayment meters. Ofgem determined that the company did not meet required standards when installing these meters and breached licence conditions designed to protect vulnerable customers.

The scandal, which surfaced three years ago, involved debt agents working for British Gas forcibly entering homes of vulnerable customers to install prepayment meters. British Gas has issued an apology, and the overall settlement package will cost the company up to £112m, covering payments, compensation, and debt write-offs.

In 2023, reports revealed agents from Arvato Financial Solutions, acting for British Gas, had forced entry into a single father's home to install a prepayment meter. An undercover reporter documented agents using a locksmith to gain access and install a meter in an ostensibly unoccupied property.

This issue was not isolated to British Gas; an industry-wide problem saw 40,000 customers have prepayment meters installed without permission between 2022 and 2023. Other suppliers, including EDF, E.On, and Scottish Power, have already agreed to compensation payouts. Ofgem subsequently banned the practice of installing prepayment meters without consent in high-risk households.

Amber Chivers recounted how, following a direct debit mix-up, workers acting for British Gas broke into her home and installed a prepayment meter. She described the experience as a “big shock and alarming” that someone entered her private home without prior notification, finding it “very upsetting.” British Gas has since apologised to her.

Ofgem's investigation found British Gas was aware of the problem as early as 2018 through an external review, with an internal audit flagging it again in 2021. However, the company did not suspend the practice until 2023.

Chris O'Shea, CEO of Centrica, British Gas's owner, apologised to affected customers, stating, “What happened should never have happened.” He added that upon discovery, 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.”

Tim Jarvis, Ofgem's boss, remarked that British Gas “fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM [prepayment meter] installed without consent.” He emphasised that warrant-backed prepayment meter installations should be a “last resort, with rigorous checks to ensure debt is recovered lawfully, proportionately and safely.”

Clare Moriarty, head of Citizens Advice, highlighted that many affected customers were left without heat during winter because they could not afford to top up their meters. She stated that such individuals “deserve real compensation” and that the settlement “helps deliver that and serves as a warning to energy suppliers not to put consumers at risk.”

Prepayment meters require customers to pay for energy in advance. Strict regulations exist to prevent suppliers from moving at-risk customers onto prepayment meters if they are struggling financially.