By Susanna Twidale
May 15 (Reuters) - British Gas owner Centrica has agreed to pay 20 million pounds ($26.69 million) into a redress fund after investigators found the utility installed prepayment meters in the homes of vulnerable customers without their consent, regulator Ofgem said.
The practice meant those customers could ultimately get their supply cut off if they did not keep topping up the meters. The Times newspaper reported in 2023 the prepay systems had been installed by debt agents working on behalf of British Gas.
“It is clear that British Gas fell short in its treatment of an unacceptable number of vulnerable customers who had a PPM installed without consent," Ofgem said in a statement.
Centrica CEO Chris O'Shea said he had apologised to affected customers.
"When these issues came to light in 2023 – we apologised, stopped the activity immediately and took rapid action to improve our processes," he said in a statement.
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British Gas will compensate those affected, write off up to 70 million pounds of energy debt and review customer records for the relevant period, Centrica said.
Customer energy debt is a growing problem in Britain. It currently stands at around 5.5 billion pounds and could grow to 7 billion pounds by the end of the year, industry group Energy UK has said.
Centrica's payment went into Ofgem's voluntary redress fund, which is used to help charities support vulnerable energy customers.
The investigation, which covered activity between February 2018 and February 2023, had now been resolved, Ofgem said.
($1 = 0.7495 pounds)
(Reporting by Ankita Bora and Prerna Bedi in Bengaluru; Editing by Sonia Cheema and Andrew Heavens)