British Gas to pay out £1.73m after prepayment meter problems

British Gas is to pay out £1.73million after 270,000 customers were hit with problems after a prepayment meter top-up arrangements change.

Following an investigation, energy regulator Ofgem found that British Gas failed to inform some prepayment customers about a change of top-up provider and minimum top-up spend.  As a result of the problems some customers may have gone off supply as a result, or suffered detriment through wasted journeys to shops where they could no longer top-up. In addition, customers were unable to contact British Gas’ enquiry line the day of the change

British Gas has paid £1.48 million to impacted customers for its failings and will pay an additional £250,000 into the energy redress fund

British Gas failed to notify around 270,000 prepayment customers about a change of top-up provider, from Paypoint to Payzone, which went live on 1st January 2020.

This meant that some customers, many of whom are in a vulnerable situation, may have suffered detriment through wasted journeys to try and top-up at shops which no longer offered the service, or in some cases may have gone off supply. British Gas ultimately sent communications to these customers in late January 2020.

British Gas informed most of its customers of the change in top-up provider in December 2019. The communication contained details not only of the change of top-up provider but also of the change in minimum top-up from £1 to £5.

This left insufficient time for customers to switch supplier if they found the new arrangements to be problematic.

The notification did not include telephone contact details, but instead contained links to the internet. Those customers unfamiliar with, or without access to, the internet may have struggled to contact British Gas in the event that they were struggling to top-up.

Additionally, British Gas chose not to operate its general enquiries line on 1st January 2020 – the go-live date.

When British Gas decided to switch to Payzone, it failed to make sure that communication with its customers was adequate both in terms of coverage and content.

Ofgem engaged with British Gas in early January 2020 when it became aware of problems with the switchover of top-up provider.

Ofgem asked for information relating to the case and as part of that request, British Gas told us that it proposed to make compensation payments of £1.48 million to impacted customers.

British Gas has also agreed to pay £250,000 to Ofgem’s voluntary redress fund administered by the Energy Savings Trust, which supports consumers in vulnerable situations and the development of innovative products or services not currently available to energy consumers.

Due to the steps British Gas has taken, Ofgem has decided not to take formal enforcement action.

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.”

Commenting on the announcement, Dame Gillian Guy, Chief Executive of Citizens Advice, said “It is unacceptable that poor communications put people at risk of being cut off from their energy supply in the middle of winter. “

“Households with pre-payment meters are disproportionately likely to be on lower incomes, have children or include people with health conditions. So it’s critical that suppliers take extra care and make sure changes like this don’t put people at risk.”

“At a time of significant change in the energy market as suppliers merge and takeovers are completed, this case shows the importance of clear communications and good customer service. All suppliers should learn lessons from this case.”