British Gas Faces £90m Payout After Prepayment Meter Scandal

British Gas will pay more than £90m in fines and compensation after it was found to have forcibly installed prepayment meters in the homes of vulnerable customers.

The energy supplier, owned by FTSE 100 company Centrica, has agreed to pay £20m to Ofgem after the regulator concluded it breached its licence conditions and failed to meet required standards.

Alongside the fine, the company will also compensate affected customers and write off £70m in energy debt owed by vulnerable households.

The penalty follows a three-year investigation by Ofgem into British Gas. The inquiry was launched after a Times investigation revealed that debt collectors working on behalf of the company were entering homes and installing prepayment meters even when customers were known to have serious vulnerabilities.

The findings sparked widespread criticism from MPs, consumer groups and government ministers.

Prepayment meters can be installed as a last resort when customers are unable to agree repayment plans with their supplier. However, British Gas later identified at least 13 cases in which contractors carried out forced installations without properly considering customer vulnerabilities.

Ofgem's chief executive, Tim Jarvis, said British Gas had "fallen short" in its treatment of vulnerable customers and that it was right the company had taken steps to address the issue.

The company has committed to reviewing customer records from 2018 to 2021 and compensating those affected.

Chris O'Shea, chief executive of Centrica, apologised to affected customers, saying the situation "should never have happened" and that the company had taken swift action once the issues came to light.

Ofgem has since banned the installation of prepayment meters in high-risk households without customer consent.

Simon Francis of the End Fuel Poverty Coalition described the findings as "shocking", saying British Gas had been aware of issues for years without taking sufficient action.

Energy minister Martin McCluskey welcomed Ofgem's action and said British Gas had taken responsibility for putting things right.

GV Hale