British Gas has agreed to pay £1.73 million over its bungled changes to prepayment meter (PPM) top-up arrangements.

The Centrica-owned retailer failed to notify 270,000 PPM customers that Payzone was replacing Paypoint as their top-up provider on 1 January – a day on which it was not operating its general enquiries phone line.

The change of provider coincided with an increase in the minimum top-up from £1 to £5. However, even where British Gas had contacted customers, it had only done so in December 2019, not allowing sufficient time for them switch to another supplier if they were unhappy.

This notification also failed to include a telephone number, directing customers instead to a series of online links.

Ofgem became involved in early January when it became aware of problems, resulting in the company proposing compensation payments of £1.48 million to impacted customers. It has also agreed to pay £250,000 to Ofgem’s voluntary redress fund.

As a result, the regulator said it had 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.”

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.”

They added: “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.”

What to read next