British Gas will pay up to £112 million in compensation, debt write-offs, and penalties following a major scandal involving the forced installation of prepayment meters in vulnerable households across Britain.
The record settlement was announced after an investigation by Ofgem found that British Gas had improperly fitted prepayment meters into homes struggling with energy bills during the height of the energy crisis triggered by rising gas prices after Russia’s invasion of Ukraine.
Under the agreement, British Gas will contribute £20 million to Ofgem’s voluntary redress fund, while writing off up to £70 million in customer debt. The company will also continue delivering a £22.4 million support package for affected households.
Ofgem described the case as one of the most complex investigations in its history, stating that many vulnerable customers were subjected to unfair treatment when prepayment meters were installed without proper safeguards or consent.
The scandal first emerged in early 2023 after reports revealed that debt agents working for British Gas had ignored signs of vulnerability while forcing entry into homes to install the meters.
The regulator later discovered that several major UK energy suppliers had engaged in similar practices during the 2022 energy cost crisis as households struggled to pay soaring utility bills.
Last year, suppliers including ScottishPower, EDF, E.ON, and Octopus Energy collectively agreed to provide more than £18.6 million in compensation and debt relief to affected customers.
Ofgem temporarily banned forced prepayment meter installations following the controversy, although the practice was later partially reinstated under stricter rules. Forced installations remain prohibited in homes with residents over the age of 75 or young children.
Tim Jarvis said the settlement was designed to restore fairness and strengthen consumer protections across the energy market.
Meanwhile, Chris O’Shea, whose company owns British Gas, apologised to affected customers and said reforms and safeguards had since been introduced to prevent similar incidents from happening again.
