British Gas owner Centrica has agreed to pay £20 million into a redress fund following an investigation by regulator Ofgem. The probe found that British Gas installed prepayment meters in the homes of vulnerable customers without their consent, potentially leading to supply cut-offs if payments weren't maintained.
Key Takeaways
British Gas owner Centrica has agreed to pay £20 million into a redress fund after investigators found the utility installed prepayment meters in vulnerable customers' homes without consent. The practice could lead to supply cut-offs if payments weren't made.
- British Gas will pay £20m into Ofgem's voluntary redress fund
- Up to £70m of energy debt will be written off for affected customers
- Centrica CEO Chris O'Shea apologized and promised improved processes
- The scandal involved meters being installed without consent between 2018 and 2023
The practice came to light after The Times reported in 2023 that debt agents working on behalf of British Gas had installed the prepay systems. Ofgem stated that British Gas 'fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM installed without consent.' Centrica CEO Chris O'Shea apologized to affected customers and outlined steps taken to address the issue.
British Gas will compensate those affected, write off up to £70 million of energy debt, and review customer records for the relevant period. The investigation covered activity between February 2018 and February 2023. Customer energy debt is a growing problem in Britain, currently standing at around £5.5 billion and projected to reach £7 billion by the end of the year.
The scandal has been described as one of the most complex investigations in Ofgem's history. The regulator temporarily banned the practice of forcing PPMs on households that missed repeated payments. British Gas will have a year to determine the exact number of households due compensation, with customers who are eligible being contacted directly by the company.
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