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British Gas to pay £1.73m over prepayment meter failings

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27/08/2020
British Gas is to pay £1.73m for failures in the way it handled changes to prepayment meter top-ups which left customers without energy or making wasted journeys to shops.

In November 2019, British Gas revealed it was ending its relationship with PayPoint for a new deal with rival Payzone from 1 January 2020.

This agreement meant the energy giant’s prepayment meter customers would no longer be able to top-up at their usual newsagent or supermarket. They would need to go to a Post Office instead and the minimum top-up amount would rise from £1 to £5.

The energy regulator Ofgem said that while British Gas informed most of its customers of the change in top-up providers in December 2019, it left insufficient time for users to plan. The notification didn’t include a contact number for inquiries, just links to the internet and British Gas chose not to operate its general inquiries line on the live date of the changes on 1 January.

Further, it failed to notify around 270,000 customers about the changes.

As a result, Ofgem said some customers, many of who are vulnerable, may have suffered detriment through wasted journeys to try and top-up at shops no longer offering the service, or in some cases may have been left without an energy supply.

British Gas finally sent communications to these customers in late January 2020.

Ofgem said British Gas failed to make sure that communication with its customers was “adequate” in terms of coverage and content.

In February, Ofgem asked British Gas to explain its rationale for switching prepayment meter provider and increasing the minimum top-up amount after concerns the changes resulted in consumer harm.

Following this, British Gas said it proposed to make compensation payments of £1.48m to impacted customers. It has also agreed to pay £250,000 into Ofgem’s redress fund administered by the Energy Saving Trust to support consumers in vulnerable situations.

Ofgem added that due to the steps British Gas has taken, it has decided not to take formal enforcement action.

Protect customers and ensure they’re treated fairly

Philippa Pickford, director of retail at Ofgem, said: “When such a fundamental change is being made, such as where meters can be topped up, energy suppliers need to communicate with their customers in plenty of time. British Gas should have informed all of their prepayment customers, many whom are in vulnerable situations, of the change to how to top-up their meters during the winter period.

“Some customers were unaware of the change before it happened and may have struggled to contact British Gas as they opted not to open their general enquiries line on the go live date. Others were given insufficient time to make alternative arrangements if they were unhappy with the change of top-up provider.

“Ofgem will continue to closely monitor the market to ensure that all customers are protected and treated fairly by their supplier.”

‘Transition wasn’t as smooth as it should have been’

A British Gas spokesperson, said: “We chose to move our prepayment top up service to Payzone as we believe they offer the best and most flexible service for our customers and will add more outlets where our customers need them. We recognise that this transition was not as smooth as it should have been and we would like to apologise again to any customer impacted.

“We respect Ofgem’s decision and will be paying an additional £250,000 to the Voluntary Redress fund.  We have already paid £1.48m in compensation to our prepayment customers who were negatively impacted by this change.

“We know that some prepayment customers are vulnerable and we take our responsibilities to them very seriously. We ensured that anyone who contacted us had heating and hot water – this included sending an engineer to manually add credit to the meter if the customer was unable to get to their nearest working top up point.”

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