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British Gas to pay out compensation to prepayment customers

Prepayment meter tariffs can be fraught with risk, and should be switched away from.

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By Matt Maynard · 27th August 2020

British Gas failed to notify some 270,000 prepayment meter customers that their top-up provider had changed from Paypoint to Payzone, and has paid out £1.48 million to customers. 

As a result, some customers wasted journeys to top up their prepayment meter cards to places that no longer offered the service, while some customers dropped off supply completely, leaving some, many of whom are vulnerable, without energy. 

This occurred at the beginning of 2020, with British Gas issuing these changes on 1st January, but only notifying customers in December of 2019, leaving a small amount of time for customers to adapt to the alterations in their supply. Not only did the changes include the top-up provider, but also the minimum top-up spend, which went from £1 up to £5. 

With such a small window of time between being notified and the changes taking place, customers were unable to switch suppliers before British Gas made the changes. Additionally, the notification alerting customers of these changes did not contain a telephone number and only internet links. Unfortunately, a lot of the customers on British Gas' prepayment meter tariffs do not have access to the internet and rely heavily on being able to pick up the phone to make a call. 

When Ofgem became aware of the problem they stepped in, and at which point were told by British Gas they were going to pay £1.48 million in compensation to the affected customers. British Gas also agreed to pat £250,000 into Ofgem's voluntary redress fund administered by the Energy Savings Trust, which helps support vulnerable customers. 

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.”  

Source: Ofgem

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