British Gas, a subsidiary of Centrica, has agreed to pay £20million into Ofgem's Voluntary Redress Fund following an investigation into legacy prepayment meter practices.
The scandal began in 2023 when it emerged, the BBC reports, debt agents working for British Gas had broken into the homes of vulnerable customers to fit prepayment energy meters.
In the wake of the matter coming to light, British Gas immediately halted the practice, apologised and took steps to improve processes.
Ofgem also banned the practice of fitting prepayment meters without customers' permission in high-risk households.
Now, British Gas has agreed to pay £20million into Ofgem's Voluntary Redress Fund and will also write off up to £70million of energy debt for vulnerable customers.
Chris O'Shea, Group Chief Executive of Centrica, said: "What happened should never have happened, and I am sorry to the prepayment customers who were affected.
"When we get things wrong, we make them right. When these issues came to light in 2023 - we apologised, stopped the activity immediately and took rapid action to improve our processes and change how we engage with customers in debt, particularly those in vulnerable situations.
"Over the last three years, we have treated this matter with the seriousness it deserves and have made changes to our practices and put safeguards in place to ensure we deliver the standards our customers have every right to expect.
"Providing help to those who need it most has always been a core part of what we do at British Gas, and this issue has been deeply felt by the many thousands of colleagues who work hard every day to do the right thing for our customers."
Tim Jarvis, CEO of Ofgem, said: “It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM 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.
“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 are a positive choice for many customers, helping them stay in control of their energy use and reporting high levels of satisfaction. Anyone worried about paying their bill should contact their supplier as early as possible to access the support available and discuss the options that suit their circumstances.
“This investigation forms part of Ofgem’s wider work to raise standards across the energy market and strengthen consumer protections. We continue to challenge suppliers to do more to identify and support customers in difficulty and proactively offer support, and our priority remains driving lasting improvements so customers can have confidence they will be treated fairly.”
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