Ofgem warns suppliers over forcible installation of prepayment meters

The energy minister has expressed “horror” at revelations about a British Gas contractor allegedly breaking into vulnerable customers’ homes as the market watchdog Ofgem warned all suppliers against forcibly installing prepayment meters.

Graham Stuart met Chris O’Shea, the chief executive of Centrica, which owns British Gas, and demanded urgent answers to issues raised by a Times investigation into the firm’s practices, which has prompted ministerial fury.

Stuart expressed horror after the Times alleged that Arvato Financial Solutions, used by British Gas to pursue debts, had broken into homes to fit prepayment meters even when there were signs that young children and people with disabilities lived there.

British Gas customers who have had their meters fitted by force recently included a mother whose “daughter is disabled and has a hoist and [an] electric wheelchair” and a woman in her 50s described in job notes as “severe mental health bipolar”.

Stuart “made it clear this kind of behaviour is unacceptable”, according to a statement after the meeting from the business, energy and industrial strategy department.

O’Shea has been asked to provide urgent answers on issues including the details of the cases, how the company will ensure it will never happen again, and how those affected can be identified and compensated. Earlier the Centrica chief executive had said: “Protecting vulnerable customers is an absolute priority … The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.” British Gas has announced that it will stop applying for court warrants to enter customers’ homes and fit prepayment meters.

In a separate statement, Jonathan Brearley, the chief executive of the energy regulator, Ofgem, said suppliers needed to “get their house in order” and said all firms had been asked to pause the forcible installation of prepayment meters.

“No energy CEO can shirk their legal and moral responsibilities to protect their own customers, especially the most vulnerable,” said Brearley, whose organisation is already looking into the wider use of the meters.

“These are serious allegations for British Gas to deal with and we are opening a comprehensive investigation into British Gas on this issue and we will not hesitate to take the strongest action needed.”

Addressing the company’s rivals, he said: “Suppliers need to reassure us that the processes for customers being moved on to prepayment meters are compliant with all Ofgem rules and, until this is done, we have asked them to pause forced installations.”

Earlier, the new bailiffs’ watchdog urged energy suppliers to overhaul their debt collection practices in the wake of the revelations.

Catherine Brown, the chair of the recently established Enforcement Conduct Board (ECB), is writing to the chief executives of the utilities after British Gas apologised for its actions.

Hundreds of thousands of homes have been switched over to prepayment this winter after falling behind on their bills amid a surge in energy prices, with the rate of installation significantly ahead of previous years.

The ECB was set up to police the activities of “civil enforcement agents” – the bailiffs used by creditors including local authorities to collect debts such as council tax – and Brown said firms such as Arvato “have not yet come under our oversight”.

But she argued that the British Gas scandal underlined the urgent need for energy companies to ensure that anyone involved in enforcement action on their behalf is properly regulated.

“Today’s news demonstrates why it is so important that utilities companies engage with us to ensure that fair treatment is delivered to all their customers who experience any form of enforcement action, including ensuring that vulnerable people are properly identified and supported,” she said.

Brown has so far failed to convince the utilities to agree to use only agents accredited by the ECB to collect unpaid energy debts – a key lever for the new agency, which does not have statutory powers.

Government figures show there were 275,000 applications in 2019 for warrants to undertake forced meter installations, and 345,000 applications in the 11 months to December last year.