British Gas has agreed to pay £20 million in compensation and penalties over its handling of prepayment meters, in what the energy regulator described as a 'chilling' case of corporate negligence. The payment follows a year-long investigation by the office of gas and electricity markets into the company's aggressive deployment of forced installations, which left vulnerable households without heating or electricity during winter.
Sources confirm that the settlement includes £12 million in direct compensation to affected customers, with the remainder covering fines and administrative costs. The regulator, Ofgem, stated that British Gas will also be required to contact every customer whose meter was wrongly fitted and offer a refund of any charges incurred.
The scandal erupted after whistleblowers revealed that British Gas had been using contractors to break into homes and force-install prepayment meters, often without warning or proper authorisation. In some cases, the meters were installed at the wrong address or on properties that were unoccupied. The practice disproportionately impacted low-income families, elderly residents and people with disabilities, many of whom rely on a constant supply of electricity for medical equipment.
Documents obtained by this newsroom show that British Gas executives were warned about the legal and ethical risks of the scheme as early as 2021, but chose to ignore internal compliance reports. One memo, dated November 2021, states that field operatives were under 'extreme pressure to hit targets' and that the company's debt recovery team was 'aware of the potential for harm but prioritised cost reduction.'
The regulator's investigation revealed that British Gas installed more than 130,000 prepayment meters over a two-year period, with nearly 10 per cent of those installations deemed inappropriate. Ofgem has now ordered the company to halt all forced installations until a full audit of its procedures is complete.
'This is a stain on the industry,' a senior regulatory source told me. 'The company's actions were not just reckless but predatory. They were squeezing the most vulnerable because they knew the system would take time to catch up. Well, the system has caught up, and the cost will be measured in more than just money.'
British Gas's parent company, Centrica, has seen its share price fall by 3 per cent since the settlement was announced. The company's chief executive, Chris Weston, said in a statement that the firm 'deeply regrets the distress caused' and that it had 'fundamentally overhauled its approach to debt management.' But for the families left in the cold, the apology rings hollow.
One victim, a 72-year-old woman from Manchester, told me her meter was installed while she was in hospital for a hip replacement. She returned to find her heating shut off and a notice demanding backdated payments. 'I've never been late with a bill in my life,' she said. 'They took my key and locked it in a box. I had to borrow money from my daughter just to turn the heat back on.'
The case has wider implications. It sets a precedent for how punitive regulators are willing to be with energy companies in an era of skyrocketing bills. It also raises questions about the use of automated debt collection systems that can override human judgement. This is not an isolated incident: similar allegations have been made against other suppliers, including EDF and Scottish Power, though none has yet faced such a substantial fine.
For now, the regulator is trying to send a message. But the question remains: who goes to jail for this? Because corporations don't act, people do. And until someone in a boardroom faces real consequences, these scandals will keep coming. The money is nice, but it doesn't change the system that allowed this to happen in the first place.
