- British Gas customers affected by forced prepayment meter installations could receive support worth up to £112 million.
- Ofgem said vulnerable households were treated unfairly during the energy crisis.
- The settlement is more than four times larger than the regulator’s previous biggest customer redress case.
British Gas will provide compensation and debt relief worth up to £112 million after Britain’s energy regulator concluded the company unfairly forced prepayment meters into the homes of struggling customers during the energy crisis.
The settlement marks the largest customer redress package in the history of Ofgem and follows a years-long investigation into the treatment of vulnerable households at the height of soaring energy bills triggered by the Russian gas crisis.
Ofgem said British Gas had fallen short in its handling of customers who were behind on payments and had prepayment meters installed without proper safeguards or consent.
Under the agreement, the company must pay £20 million into Ofgem’s voluntary redress fund, continue delivering a £22.4 million customer support package introduced after the scandal emerged, and write off debts worth up to £70 million.
The combined package could support thousands of households across Britain.
Tim Jarvis, chief executive of Ofgem, reportedly said British Gas had failed “an unacceptable number of vulnerable customers” and described the compensation package as necessary to help put things right.
The regulator said the installation of prepayment meters should only ever happen as a “last resort” and must involve stronger checks to ensure vulnerable customers are protected.
How the scandal unfolded
The controversy first erupted in early 2023 after reports emerged that debt agents working on behalf of British Gas had ignored signs of vulnerability while forcing prepayment meters into homes under court warrants.
The revelations triggered national outrage during the cost-of-living crisis, when many households were already struggling with sharply rising energy bills.
Ofgem temporarily banned suppliers from forcibly installing prepayment meters in homes where customers repeatedly missed payments.
The regulator later widened its investigation and found multiple major energy companies had failed to meet required standards while recovering unpaid debts during the 2022 energy crisis.
Last May, suppliers including ScottishPower, EDF Energy, E.ON, Octopus Energy and others collectively agreed to provide more than £18.6 million in compensation and debt write-offs to around 40,000 households.
But the British Gas case has become by far the largest and most politically sensitive investigation linked to forced meter installations.
Trust in the energy market still under pressure
The regulator said the full scale of the British Gas case may still not be fully known because investigators reviewed only a sample of affected households during the inquiry.
The company will now have up to a year to identify exactly how many customers qualify for compensation or debt relief.
Energy consumers minister Martin McCluskey reportedly described the scandal as an “unacceptable national scandal” and said public trust in the energy market had been badly damaged.
He reportedly added that planned reforms aimed at strengthening Ofgem’s powers were intended to prevent similar cases from happening again.
Chris O’Shea, chief executive of Centrica, which owns British Gas, reportedly apologised to affected customers and acknowledged the situation “should never have happened”.
He also said the company had introduced new safeguards and changed its practices following the scandal.
Although Ofgem later lifted its temporary moratorium on forced meter installations, suppliers are still banned from fitting prepayment meters in homes with residents over the age of 75 or households with very young children.
For many households affected during the energy crisis, however, the compensation package may reopen broader questions about how vulnerable customers were treated during one of the toughest periods Britain’s energy market has faced in years.
