Ofgem had 'wool pulled over their eyes' amid prepayment meter scandal, says Grant Shapps

Business Secretary Grant Shapps has hit out at Ofgem for listening to energy company bosses over customers, following the forceful installation of prepayment meters.

Mr Shapps accused the energy regulator of having "the wool pulled over their eyes" and told it to toughen up on suppliers after "vulnerable" customers struggling with their energy bills had pay-as-you go gas and electricity meters wrongfully installed in their homes.

It follows an investigation by the Times, which showed that a company used by British Gas to pursue debts, Arvato Financial Solutions, was forcing its way into homes to fit the devices, despite signs that children and disabled people were living there.

A whistleblower also told Sky News that British Gas staff have been under pressure to collect more debt and fit more meters.

Mr Shapps said he was "appalled" by the "abhorrent behaviour" of energy companies and told them to "refocus their efforts on their consumers".

"I'm also concerned the regulator is too easily having the wool pulled over their eyes by taking at face value what energy companies are telling them," he said.

"They need to also listen to customers to make sure this treatment of vulnerable consumers doesn't happen again."

He said he had hauled in British Gas' boss and he had previously made clear to Ofgem they could not do this but all they did was go to the energy company and tell them to follow the rules, which the companies were saying they were, without a proper investigation.

He told Sky News' Sophy Ridge on Sunday programme: "I want to make sure that this does not occur in modern Britain today, it's absolutely disgraceful.

"No one should have their home invaded like that."

Mr Shapps added that he had taken "swift action" and said companies could ultimately lose their licences for forcefully installing pre-payment meters.

He also said questions need to be asked about why thousands of court warrants are being granted to allow gas companies to enter homes "without proper, considerate consideration on an individual basis".

"I think there's plenty that's gone wrong here and I'm absolutely going to fix it," he said.

In response, Ofgem said it shared Mr Shapps' "shock" at the findings of the investigation.

It has placed British Gas under review and on Friday asked all other domestic energy companies to suspend the forced installation of prepayment meters and review their processes for dealing with customers who have fallen into arrears.

Read more:
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Ofgem tells suppliers to suspend forced installation of prepayment meters
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"What is clear, as the secretary has laid out, is that the picture presented by companies may not accurately reflect what is experienced by customers on the ground," Ofgem said in a statement.

"Therefore, further reviews will cross examine what we have had reported to us with direct reports from customers and wider stakeholders, and potentially those involved in delivery of services."

Shadow business secretary Ed Miliband accused Mr Shapps of being a "do-nothing business secretary" who has "sat on his hands in the face of the scandal" after repeatedly failing to take action over the issue.

He called on Mr Shapps to adopt Labour's call for a "total and ongoing ban on the forced installation of prepayment meters until there is wholesale reform of a discredited, rotten and callous system".

Currently companies can move customers who are behind on their energy bills onto the more expensive prepayment meters, but rules are supposed to ensure vulnerable customers are not forcibly moved.