Thousands of British Gas customers could receive compensation or debt relief after Ofgem found serious failings in the company’s use of forced prepayment meter installations.
The regulator concluded that vulnerable customers had prepayment meters installed without proper safeguards, following an investigation into practices dating back several years.
The case has raised major questions about how suppliers treat customers in debt, particularly during periods of financial hardship.
What happened?
British Gas came under scrutiny over its use of court warrants to enter customers’ homes and install prepayment meters (PPMs). Prepayment meters require households to pay for energy in advance by topping up credit. If the balance runs out, the energy supply can stop.
Energy suppliers are allowed to apply for warrants to install these meters where debts remain unpaid. However, regulators say forced installations should only ever happen as a last resort, particularly where vulnerable customers may be involved.
Public concern intensified in 2023 after reporting revealed how agents working on behalf of British Gas had forced entry into customers’ homes to install meters under warrant.
Ofgem has since found that British Gas had failed to properly protect some vulnerable customers during the process.
- Concerns about the company’s practices were first identified in 2018 through an external review
- The issue was raised again in an internal audit in 2021
- The company did not suspend forced installations until 2023.
British Gas owner Centrica has apologised, saying changes have since been made to improve customer protections and safeguards.
Why has this become such a major issue?
The scandal raised wider concerns about how energy suppliers recover debt from vulnerable households.
Consumer groups warned that prepayment meters could leave vulnerable households without heating or electricity, creating serious risks during winter and periods of high energy costs.
Citizens Advice chief executive Clare Moriarty 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.”
She added that the settlement should serve as a warning to energy suppliers not to put vulnerable consumers at risk.
Following investigation, Ofgem has now banned suppliers from forcibly installing prepayment meters in high-risk households without customer consent.
What compensation is being offered?
The settlement package announced by Ofgem includes:
- Compensation for customers who had prepayment meters installed between 2018 and 2021
- Additional compensation for customers affected between 2022 and 2023
- Up to £70 million in debt write-offs for vulnerable customers
- The remainder of a £22.4 million support package for prepayment customers launched in 2023
- The creation of a Vulnerable Customers Debt Advisory Panel within British Gas.
British Gas is not the only supplier caught up in this scandal. Around 40,000 customers across the energy industry are believed to have had prepayment meters forcibly installed or installed without proper safeguards between 2022 and 2023. EDF Energy, E.ON and Scottish Power have already agreed compensation packages linked to prepayment meter investigations.
What happens next
Ofgem says customers who qualify for compensation will be contacted directly and do not need to take action at this stage.
The regulator has not yet confirmed how many customers could ultimately be eligible.
