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British Gas has agreed to contribute £20 million to a redress fund and provide compensation to customers, resolving a regulatory investigation concerning the forced installation of prepayment energy meters. This issue came to light three years ago when it was revealed that debt agents acting on behalf of British Gas had unlawfully entered the homes of vulnerable customers to fit these meters.
According to the energy regulator Ofgem, British Gas has also committed to writing off up to £70 million in energy debt for vulnerable customers, some portion of which will serve as additional compensation. Following the inquiry, Ofgem banned the practice of installing prepayment meters without customer consent in households identified as high risk. The scandal extended across the energy sector, with around 40,000 customers having meters forcibly installed during 2022 and 2023.
The investigation uncovered that British Gas was first alerted to the problem in 2018 through an external review, and a subsequent internal audit in 2021 highlighted the issue again. However, the company did not halt the practice until 2023. Ofgem’s chief executive, Tim Jarvis, criticized British Gas for failing numerous vulnerable customers, stating, “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.” During the investigation, it was revealed that agents, employed by Arvato Financial Solutions on British Gas’s behalf, had forcibly entered the home of a single father to install a meter, only proceeding after confirming the property was empty.
Chris O’Shea, chief executive of British Gas’s parent company Centrica, issued an apology to the affected customers, acknowledging that “What happened should never have happened.” He emphasized that the company immediately stopped the disputed practice when the issue emerged and introduced changes to improve processes and the handling of vulnerable customers in debt. “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,” O’Shea added.
Simon Francis, coordinator of the End Fuel Poverty Coalition, described the investigation’s findings as “truly shocking” and called for legislative action, stating, “The forthcoming Energy Independence Bill must include provisions to end the forced installation of pre-payment meters and fundamentally reform the warrant process. This scandal must never happen again.” Prepayment meters—which come in three types including key meters, smart card meters, and smart prepayment meters—require customers to pay for energy before use, often topping up credit at local shops or post offices. Strict regulations prohibit suppliers from moving customers who are at risk of payment difficulties onto these meters. Problems frequently arise when residents run out of credit on their meter and have no funds to recharge, leaving them without heating or the ability to cook
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