British Gas to pay out £1.73 million for prepayment failures

Prepayment meter failings

The failings listed by the energy regulator Ofgem included British Gas’s failure to notify its 270,000 prepayment meter customers, many of which are on the priority service register, that it had changed its chosen top-up provider from Paypoint to Payzone.

This resulted in many customers having to undertake wasted journeys to top up their meters at shops that no longer offered the service. The change occurred on January 1^st, 2020 but British Gas failed to notify its customers in sufficient time. 

Poor Communications

The main cause for the compensation payment comes down to British Gas’ failure to communicate with its customers and ensuring that it was adequate for all of them.

Instead, the comms they sent out were geared towards internet using customers, which resulted in those without internet or who struggle to use computers being negatively impacted.

The company sent out initial communications in December 2019, but for many customers, this left insufficient time for customers to switch supplier if they found the new arrangements to be problematic.

On the day of the change of provider affected customers were unable to contact British Gas’ enquiry line due to it not operating its general enquiry phone line.

This resulted in some being unable to top up their meter in the depths of winter and even going off supply causing difficulties and stress for the consumer.

British Gas then sent further communications later in January, but by that time the damage was done.

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 of 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.” 

No Enforcement action taken

British Gas informed Ofgem of the issue and announced that it will be making compensation payments of up to £1.48 million to the affected customers.

The company also agreed to pay £250,000 to the regulators' voluntary redress fund.

As a result of this action, Ofgem announced that will not be taking any enforcement action against them.

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.”

Further Reading 

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