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(Sharecast News) - Centrica unit British Gas will have to provide a compensation and debt write-off package worth more than 110m after debt collectors working on behalf of the company broke into the homes of customers - including residents who were vulnerable or had disabilities - to install prepayment meters.
British Gas will write off up to 70m of vulnerable customers' energy debt, some of which could be used as compensation, the company said in a statement on Friday. It will also pay a 20m penalty issued by industry regulator Ofgem and continue to provide the rest of a 22.4m voluntary assistance package it launched in the wake of the scandal.
The company will now review customer records "and provide redress and compensation wherever possible", including payouts to those affected during 2018-21 - in addition to the compensation already paid for the period 2022-23 - alongside the writeoff.
Ofgem banned the practice of fitting prepayment meters without customers' permission in high-risk households.
An investigation by the Times newspaper revealed how agents working for debt collector Arvato Financial Solutions forced their way into homes to install prepayment meters.
After establishing the property was unoccupied, an undercover reporter observed the agents work with a locksmith to force their way in and install a meter.
The regulator later found that most of major energy suppliers had forced the meters into the homes of customers as the energy cost crisis in 2022 after Russia's invasion of Ukraine caused many to miss payments on their bills.
Its British Gas investigation concluded about one year after a separate investigation found that ScottishPower, EDF, E.ON, Octopus Energy, Utility Warehouse, Good Energy, TruEnergy and Ecotricity had fallen short of the regulator's standards when fitting the meters to reclaim unpaid energy debts.
They were ordered to pay 40,000 households more than 18.6m in compensation and debt write-offs on their bills.
"The installation of prepayment meters under warrant should only be a last resort, with rigorous checks to ensure debt is recovered lawfully, proportionately and safely," said Ofgem CEO Tim Jarvis.
Reporting by Frank Prenesti for Sharecast.com
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