British Gas to pay £20m for treatment of prepayment meter customers

British Gas is to pay £20m over its treatment of customers who had a prepayment meter forcibly installed.

It comes as an investigation by energy regulator Ofgem found the supplier failed to meet standards required when installing prepayment meters, and that it breached licence conditions designed to protect vulnerable customers.

Up to £70m of energy debt will also be written off as part of the agreement.

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British Gas had previously agreed to provide a £22.4m voluntary support package specifically to support pre-payment meter customers.

The regulator described the investigation as one of the most detailed and complex in its history.

What happened?

Some vulnerable customers who were in energy bill arrears had their homes broken into so that agents acting for the utility company could install a pre-payment meter.

The practice of seeking involuntary installation of prepayment meters took place between February 2018 and February 2023, when it was stopped, having been uncovered by The Times newspaper.

The company, however, had been made aware of meters being installed when not appropriate through an external review in 2018 and an internal audit in 2021, Ofgem found.

"It was clear that some customers who had an involuntary prepayment meter installed were not treated with the care and respect that they deserved," British Gas said on Friday.

"There were also errors in identifying some customers in vulnerable situations who should have been excluded," it added.

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British Gas has apologised and has since strengthened governance, oversight and safeguards for vulnerable customers, it said.

Chris O'Shea, group chief executive of British Gas owner Centrica, said: "What happened should never have happened, and I am sorry to the prepayment customers who were affected.

Tim Jarvis, chief executive of watchdog Ofgem, said: "It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a prepayment meter installed without consent, and it's right that they've taken action to put things right.

"Because of our action customers will receive a substantial package of redress, compensation and debt write off."

He added: "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."

Smart pay as you go meters were a "positive choice for many customers" instead, according to the boss.

Compensation for customers

Some 40,000 customers who had a prepayment meter installed without their permission between 2022 and 2023 are already receiving compensation from suppliers.

While compensation to affected customers has already been paid, more has been agreed for energy users impacted from 2018 to 2021.

British Gas said it would now undertake a comprehensive review of its customer records and provide redress and compensation wherever possible for affected customers.

Customers do not need to take any action and will be contacted directly by British Gas.

(c) Sky News 2026: British Gas to pay £20m for treatment of prepayment meter customers