British Gas pays out £1.5 million to prepayment customers

British Gas switched its top-up provider for prepayment customers from PayPoint to Payzone on 1 January this year – but it didn't tell 270,000 customers about the change.

This meant that some prepayment customers, many of whom are vulnerable, could have made wasted trips to top up their meters at shops which no longer offered the service. Energy regulator Ofgem says some could even have gone off supply.

British Gas has now paid £1.48 million in compensation to affected customers, as well as paying £250,000 into Ofgem's voluntary redress fund, which supports vulnerable customers and the development of innovative products for energy customers. As a result, Ofgem says it won't be taking any formal enforcement action against British Gas.

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What went wrong?

British Gas informed most of its customers it would be changing its prepayment top-up provider in December 2019, ahead of the change coming into force in January 2020.

It also told most customers at this point that the minimum top-up amount would be changing from £1 to £5 (though it later reversed this decision and reinstated the £1 minimum after a customer backlash).

Ofgem says this didn't give customers enough time to switch supplier ahead of the change if they weren't happy.

And its notification to customers only gave internet-based links to contact British Gas, not telephone details – meaning customers who can't access or struggle to use the internet could have found it more difficult to contact British Gas if they weren't able to top up.

On top of this, British Gas failed to inform 270,000 customers of the change at all before it happened. These customers were eventually sent communications from British Gas in late January 2020, after the switch to Payzone had already taken place.

British Gas also didn't operate its general enquiries contact line on 1 January 2020, the day the change came into force.

What compensation has British Gas paid?

British Gas has paid out £1.48 million to customers affected by its failure to send notifications about the switch in top-up providers, and those who were far away from their closest working top-up terminal as a result of the switch. We've asked British Gas how many customers in total have received compensation, and will update this story when we hear back.

British Gas says customers have received different amounts depending on the level of detriment they've suffered. 

It says the method used to pay the compensation to customers also varied, and could have been either as credit on the customer's meter or as a cheque – so it's worth double-checking if you think you might have been owed a payment.

British Gas says everyone entitled to compensation has now been paid, so there should be no need to get in touch. But if you think you should have received compensation and didn't, or you're a prepayment customer affected by the switch and aren't happy with the communication you received, you can make a complaint to British Gas.

What does British Gas say? 

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 £1.48 million 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."