Bad Centrica in London, British Gas will compensate customers for meter scandal

(Il Sole 24 Ore Radiocor) - Centrica retreated on the London Stock Exchange, down close to four points, after announcing that its subsidiary, British Gas Trading, will pay £20 million in compensation and take other compensatory measures following an investigation by Ofgem, the industry authority, into what has been dubbed the 'meter scandal'.

British Gas has been investigated by the UK electricity and gas regulator for installing prepayment meters without customer consent. At the end of the investigation, Ofgem concluded that British Gas 'failed to meet the standards required of an energy supplier in the installation of prepayment meters and breached the terms of its licence specifically designed to protect vulnerable customers'.

The regulator "also found that some of the deficiencies underlying these breaches had been brought to the attention of British Gas management through an external audit in 2018 and an internal audit in 2021. Although corrective action was taken in response to these findings, these actions were inadequate." Following the authority's findings, "British Gas agreed to pay £20 million to Ofgem's Voluntary Compensation Fund."

In addition to this, British Gas has agreed to a settlement package that includes: compensation to affected customers in the period 2018-2021, in addition to payments already made to affected customers in the period 2022-2023, the cancellation of energy debts of up to £70 million for vulnerable customers, and the disbursement of the remainder of a £22.4 million voluntary support package launched by British Gas in 2023, designed to support customers with instalment supply contracts. Also plannedis the creation of a new Debt Vulnerable Customer Advisory Board, tasked with informing and supporting British Gas in its aim to develop industry-leading practices for dealing with vulnerable customers in debt.