British Gas has agreed to pay £20 million into Ofgem’s voluntary redress fund to settle an investigation into the forced installation of prepayment meters on vulnerable customers.
The regulator’s investigation covered the period between February 2018 and February 2023, during which prepayment meters were installed under warrant without what Ofgem considered to be adequate customer protection safeguards.
Parent company Centrica said the matter had been resolved through “alternative action” with the regulator, avoiding a formal enforcement finding.
Alongside the £20 million payment, British Gas will write off up to £70 million in energy debt owed by vulnerable customers and conduct a full review of customer records covering the investigation period to identify individuals eligible for further compensation.
The company confirmed that customers affected between 2018 and 2021 will now receive redress for the first time, extending compensation beyond payments already made to affected customers during 2022 and 2023.
British Gas said eligible customers do not need to take any action and will be contacted directly where appropriate.
The controversy emerged in early 2023 after reports that debt recovery agents acting on behalf of British Gas had forcibly entered homes to install prepayment meters, including at properties occupied by elderly and vulnerable customers.
Centrica Chief Executive Chris O’Shea said: “What happened should never have happened, and I am sorry to the prepayment customers who were affected.”
Following the scandal, British Gas suspended warrant-based installations and ended the use of third-party contractors for field debt recovery work.
The company has confirmed that warrant-based prepayment meter installations have not resumed.
British Gas will also establish a new advisory panel focused on vulnerable customers in debt, bringing together independent experts over a two-year period to help develop improved industry practices.
The announcement comes as total household energy debt across the UK sector is forecast by Energy UK to reach approximately £7 billion later this year.
Centrica added that the settlement is not expected to affect its financial guidance for 2026.
