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British Gas Faces $26.7 Million Redress Payment Over Vulnerable Customer Failures

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British Gas agreed to pay 20 million British pounds ($26.7 million) after Ofgem found the supplier had wrongly installed prepayment meters for vulnerable customers on Friday.

Ofgem found British Gas failed to meet supplier standards aimed at protecting vulnerable customers during the investigation, it said.

Customers affected between 2018 and 2021 will receive compensation from British Gas, in addition to the payments the company already made in 2022 and 2023.

Under a separate plan agreed with Ofgem, British Gas will cancel up to 70 million British pounds of debt owed by vulnerable energy customers, according to Ofgem.

The company will also continue delivering the remaining part of its 22.4 million British pound support package created in 2023 for prepayment meter customers.

To improve future customer treatment, British Gas plans to launch a new Vulnerable Customers Debt Advisory Panel focused on debt support for vulnerable households, Ofgem said.

During one of its largest investigations, Ofgem reviewed five years of British Gas policies, thousands of customer cases, and complaints gathered from Citizens Advice and the Energy Ombudsman linked to prepayment meter installations.

After suspending forced prepayment meter installations in February 2023, British Gas strengthened oversight processes and added new customer protection measures.

Ofgem said earlier company reviews in 2018 and 2021 had already identified weaknesses, but British Gas failed to maintain long-term improvements.

Chief Executive Tim Jarvis said suppliers should use warrant-led prepayment meter installations only as a final option during debt recovery efforts.

Separately, Ofgem said eight energy suppliers provided a combined 73.6 million British pounds in compensation, debt relief and hardship payments after a wider sector review.

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