British Gas has agreed to a £20 million payout and to compensate customers who had a prepayment meter installed without their permission, regulator Ofgem has said following an investigation.
The watchdog found that British Gas failed to protect vulnerable customers by forcibly fitting the energy meters into people’s homes in previous years.
The energy supplier will compensate customers who were affected in 2018-21, on top of payments that have already been made to those affected in 2022-23.
British Gas will also write off up to £70 million of energy debt for vulnerable customers as part of the agreement.
Those who are due compensation will be contacted by British Gas and do not need to take action.
British Gas has agreed to a settlement in relation to its treatment of customers who had a prepayment meter (PPM) installed without their permission.
— Ofgem (@ofgem) May 15, 2026
Learn more about the investigation here: https://t.co/4ULwZ1nxnZ pic.twitter.com/cKbeJCIQFD
Ofgem, which launched an investigation and changed the rules after the industry-wide practice was publicly exposed, said its probe into five-year long policies and procedures had been one of the most complex in its history.
Tim Jarvis, the watchdog’s chief executive, 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.
British Gas apologised to people affected by its actions and asserted that it has not been force-fitting prepayment meters since February 2023 when the issue was first exposed.
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.
“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.”
Some 40,000 customers who had a prepayment meter installed without their permission between 2022 and 2023 are already receiving compensation from suppliers including EDF, E.On and Scottish Power.
The scandal first made headlines three years ago, at the peak of the cost-of-living crisis, when it came to light that energy suppliers were entering people’s homes to switch people onto prepayment methods.
The practice was subsequently paused after a public outcry and Ofgem launched a review of the process.
However, late last year it emerged that magistrates were approving batches of warrants for utility companies to break into people’s homes, including for the fitting of prepayment meters.
Under current rules, suppliers must make at least 10 attempts to contact a customer and give at least 10 days’ notice of a warrant being applied for before asking a court to approve the fitting of a prepayment meter.
Mr Jarvis said it was “a matter for the courts how they deal with these applications”.
He told BBC Radio 4’s Today programme: “Even once a supplier has a warrant they still have to follow our rules, and our rules are quite strict about the protections they need to put in place to ensure customers aren’t being harmed.”
But he recognised that “clearly there needs to be some sort of sanctions and some way of recovering money” from people who do not pay their energy bills.
“We’ve certainly seen a very big increase in the amount of debt and arrears in the energy system,” he said, pointing out that “large numbers of customers struggled to pay their bills” after the last energy crisis sparked by Russia’s war in Ukraine.
“We need to get the right balance,” Mr Jarvis said.
“We are working very closely with debt charities, suppliers and the Government to get the right framework in place to incentivise and encourage people to pay their bills and enable suppliers to recover their debt, while protecting the most vulnerable.”
Minister for Energy Consumers, Martin McCluskey, said the forced installations of prepayment meters was an “unacceptable national scandal”, adding: “It is good to see Ofgem standing up for people and British Gas taking responsibility to put things right.
“They must make sure the victims see every penny of the compensation they are owed.”
“Our reforms, including those we set out last month to strengthen the energy regulator, will help make sure injustices like these never happen again – incentivising companies to act in customers’ best interests and empowering Ofgem as a true consumer champion.”
