BRITISH GAS has agreed to a £20 million payout and compensation for customers who had prepayment meters installed without their permission, regulator Ofgem said today.

The watchdog’s investigation found that British Gas failed to protect vulnerable customers by forcibly installing energy meters in people’s homes.

British Gas said it would compensate customers affected in 2018-21, in addition to payments already made to those affected in 2022-23.

The energy supplier will also write off up to £70m of energy debt for vulnerable customers.

Ofgem chief executive Tim Jarvis 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.”

The scandal first made headlines three years ago, at the peak of the cost-of-living crisis, when it emerged that energy suppliers were entering people’s homes uninvited to switch them onto prepayment methods. 

Up to 40,000 customers affected between 2022 and 2023 are already receiving compensation from suppliers including EDF, E.On and Scottish Power.

British Gas apologised to people affected by its actions and said it has not been force-fitting prepayment meters since February 2023.

End Fuel Poverty Coalition co-ordinator Simon Francis said British Gas “has finally been held to account” for the scandal but warned the outcome “should not be mistaken for the end of this story.”

“They have confirmed that British Gas knew about these failings as far back as 2018, was warned again in 2021 and still did not take adequate action,” he said.

“Households in energy debt are not there through choice.

“They are struggling because of five years of sky-high energy costs and an energy industry that has generated extraordinary profits while households suffer.”

He warned that courts are still using batch processing to approve warrants for forced entry and customers are not given the right to defend themselves during this process.

The upcoming Energy Independence Bill “must include provisions to end the forced installation of pre-payment meters and fundamentally reform the warrant process,” Mr Francis said.

Energy consumers minister Martin McCluskey called the forced installations an “unacceptable national scandal,” adding that Ofgem must “make sure the victims see every penny of the compensation they are owed.”