British Gas owner Centrica has agreed to pay £20 million (around $26.7 million) into a redress fund after regulators uncovered serious failings in how it installed prepayment meters in customers’ homes without proper consent.
The decision follows an investigation by Ofgem, which found that vulnerable customers were disproportionately affected by the practice.
Regulator Finds Serious Failings in Customer Treatment
Ofgem confirmed that British Gas allowed prepayment meters to be installed in homes without clear customer approval. In many cases, these meters were fitted in households already struggling financially.
As a result, some customers faced the risk of having their energy supply cut off if they failed to top up their meters.
The regulator said the company did not meet expected standards when dealing with vulnerable households. It also noted that the process fell below acceptable industry practices.
Company Response and Apology
Centrica CEO Chris O’Shea acknowledged the findings and issued an apology to affected customers. He said the company took immediate steps once the issue came to light in 2023.
He also stated that British Gas halted the practice and introduced stronger internal checks to prevent similar cases in the future.
Compensation and Debt Relief Measures
In addition to the £20 million redress payment, British Gas will also:
- Write off up to £70 million in energy debt
- Review customer records from the affected period
- Provide support to impacted households through compensation schemes
These measures aim to address financial harm caused to customers during the review period between 2018 and 2023.
Read more:Pound Holds Near 10-Week High
Growing Energy Debt Crisis in the UK
Energy debt continues to rise across Britain. Industry estimates suggest household energy debt now stands at around £5.5 billion. Experts warn it could climb to £7 billion by the end of the year if conditions do not improve.
Charities supported through Ofgem’s voluntary redress fund will receive part of the compensation to help vulnerable consumers manage energy costs.
What the Investigation Covered
The Ofgem investigation examined British Gas practices over a five-year period. It concluded that while the company has since made improvements, past actions caused significant harm to certain customers.
The regulator confirmed the case has now been closed following the agreed settlement.
FAQs
1. Why did British Gas have to pay £27 million?
Because Ofgem found it installed prepayment meters in some homes without proper consent.
2. Who will receive the compensation?
Vulnerable customers affected between 2018 and 2023 will benefit through redress and debt write-offs.
3. Did British Gas admit wrongdoing?
The company accepted the findings and apologized, saying it has improved its processes.
4. Will more investigations happen?
Ofgem has not announced new investigations in this case after the settlement.
Hashtags
#BritishGas #Ofgem #EnergyBills #UKNews #ConsumerRights #EnergyCrisis #Centrica
