British Gas has been ordered to pay £20 million after a regulator investigation found the energy giant forcibly installed prepayment meters in the homes of vulnerable customers, including those with mental health conditions and disabilities. The fine, announced by Ofgem on Thursday, comes as the watchdog introduces stricter rules governing the use of such meters by all suppliers.
Ofgem’s investigation revealed that between January 2020 and March 2023, British Gas’s third-party debt collection agents broke into properties to install prepayment meters without proper checks on customer vulnerability. In some cases, meters were fitted despite customers having medical equipment requiring constant power or being in the midst of a mental health crisis. The company self-reported the failings in 2023 after a whistleblower leaked documents to a national newspaper.
“This was a systematic failure by British Gas to treat customers fairly,” said Jonathan Brearley, chief executive of Ofgem. “Forcing prepayment meters on vulnerable households is simply unacceptable. The £20m penalty reflects the severity of these breaches.”
The scandal has cast a harsh light on the use of prepayment meters, which require customers to top up credit or face automatic disconnection. Unlike traditional billing, these meters often charge higher standing charges and unit rates, hitting the poorest households hardest. With energy prices still elevated after the global gas crisis, nearly 4 million UK households are currently on prepayment meters, according to industry figures.
Under the new rules, suppliers must obtain a court warrant before installing a prepayment meter in any residential property. They are also required to conduct a vulnerability assessment for every customer facing forced installation, including checks on health, age, and income. Companies found in breach face fines of up to 10 per cent of their annual turnover.
Centrica, the parent company of British Gas, said it accepted the findings and had already compensated affected customers with £2.8 million. “We apologise unreservedly to those let down by our processes,” said a spokesperson. The firm has stopped forced installations entirely since the scandal broke.
Critics argue the fine is too small relative to British Gas’s annual profits of £3.3 billion. Citizens Advice called for a complete ban on prepayment meters, stating that the technology “weaponises energy disconnection” against the poor. Meanwhile, energy analysts warn that the crackdown could slow the rollout of smart meters, which are seen as a key tool for managing demand and integrating renewables.
The prepayment meter controversy underscores a deeper tension in Britain’s energy system: how to balance affordability with the need to recover costs for network maintenance and the green transition. As the weather turns colder, the regulator’s actions will be watched closely by millions who fear being cut off from the grid.
Ofgem’s decision marks a significant shift in regulatory stance. For years, prepayment meters were seen as a necessary evil to manage debt. Now they become a battleground over energy justice, as the physical reality of fuel poverty collides with the mathematical certainties of climate action.
