Britain’s energy providers have been ordered to suspend all prepayment meter installations by industry regulator Ofgem.
Speaking on Thursday, Ofgem chief Jonathan Brearley said he’d asked all suppliers to review “all activities regarding prepayment meter warrants” until they can “reassure” Ofgem that their processes are compliant with the regulator’s rules.
“I will not hesitate to take the strongest action in our powers where needed,” Brearley said.
“No energy CEO can shirk their legal and moral responsibilities to protect their own customers, especially the most vulnerable.
“These are serious allegations for British Gas to deal with and we are opening a comprehensive investigation into British Gas on this issue.
“It is right British Gas has apologised following the very worrying allegations in The Times, but millions of customers expect action not warm words.”
British Gas, along with several more energy companies including EDF, have suspended the practice, while the Times has said Scottish Power and E.ON have also followed suit.
OVO and Octopus Energy said they have not used the practice recently.
Ofgem’s orders came just hours after ministers highly criticised British Gas and its owner Centrica for the controversial practice.
Energy minister Graham Stuart has asked the energy giant to urgently outline “redress” for “mistreated customers,” while Business Secretary Grant Shapps described the forced pre-pay installations as “outrageous.”
Stuart said he was “horrified” to read about the “mistreatment” of these customers, and said he would “make sure justice prevails” following a meeting with Centrica’s chief executive Chris O’Shea.
He said: “I have asked Mr. O’Shea to report back to me urgently outlining the role he will take personally to fix these very serious cultural issues.
“I told him I want to see these vulnerable, mistreated customers identified and redress provided.
“I will be monitoring matters extremely closely to make sure justice prevails.”
Shares Plunge
Shares in Centrica plunged by more than 3 percent on Thursday—one of the worst performers on the FTSE 100 since the scandal broke.An undercover reporter for the newspaper worked for debt-collecting contractor Arvato Financial Solutions and accompanied agents who used court warrants to gain entry into customers’ homes to force-fit the meters.
The reporter witnessed agents from debt collecting company Arvato Financial Solutions breaking into the home of a single father of three young children with a locksmith to change the meter in sub-zero temperatures, meaning the family would have no heating unless they top up, according to the newspaper.
Job notes involving British Gas customers in recent weeks also showed that a woman with “severe mental health bipolar” disorder, a woman who has “mobility problems and is partially sighted,” and a mother whose “daughter is disabled and has a hoist and [an] electric wheelchair” had their homes fitted with prepayment meters, the report said.
Chris O’Shea, Centrica’s chief executive, has since described the practice as “unacceptable.”
“Protecting vulnerable customers is an absolute priority and we have clear processes and policies to ensure we manage customer debt carefully and safely,” O’Shea said on Thursday.
“The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.”
Last Resort
Energy companies can obtain court warrants which give them legal rights to enter people’s homes and fit prepayment meters if customers have not paid their bills.Customers must then top up to continue receiving gas supplies and, if they fail to do so, they risk their heating being cut—but the government has said that forcible meter fittings “should only ever be a last resort.”
Caroline Flint, chairwoman of the Beis-sponsored fuel poverty advisory committee, suggested conducting a review into whether the practice of forcibly installing energy prepayment meters “should happen at all.”
Speaking to BBC Radio 4’s Today programme on Friday, the former Labour MP said: “I think energy companies have been given the benefit of the doubt on this for too long and now I think it is right to have this moratorium.
“But also, it is right to consider whether or not forced installation of meters should happen at all.”
Flint was also critical of the courts’ role in the affair, saying: “We might need new laws but I think the courts need to look to themselves on this as well.
“I think there is a question about how these warrants seemed to have been waved through.”
Emma Pinchbeck, the chief executive of Energy UK, which represents suppliers, also told the BBC programme that putting households onto prepayment meters should be a “last resort.”
“There are really clear rules around this—prepay should be a last resort option to come after lots of contact with customers.
“It should never be the case that we are putting people on prepay who are in vulnerable circumstances.”
