Ofgem asks suppliers to suspend compulsory installation of prepaid meters, Sky News understands UK News

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Ofgem, the energy regulator, has asked suppliers to suspend the compulsory installation of prepaid meters and review their procedures for dealing with customers who are late on debt payments.

Sky News understands the regulator made the request on Thursday after it was revealed that debt collectors working for British Gas had forced their way into the homes of vulnerable customers.

Industry sources said Ofgem had asked all suppliers to stop requests for court orders allowing them to enter the homes of customers who failed to respond to attempts to deal with arrears.

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0:34 British gas debt collector threatens client

Suppliers are required to follow up on all available alternatives over a six-month period before orders are executed and are not allowed to charge prepayment to vulnerable customers.

Centrica, the parent company of British Gas, said it applied for about 97,000 arrest warrants last year and processed about 20,000 of them.

Jonathan Brierley, chief executive of Ofgem, said: “I have warned all local energy suppliers against arranging their homes on forced payments from prepaid meters.

“I have ordered the largest ever market review of pre-paid meters to uncover malpractice – and I will not hesitate to take the strongest action in our powers when needed.

“No CEO of energy can shirk his legal and ethical responsibilities to protect his customers, especially the most vulnerable. These are serious allegations that BP must deal with and we are opening a thorough investigation into BP into this matter and will not hesitate to take the strongest action required.”

British Gas has rightly apologized after the deeply troubling allegations in The Times, but millions of customers expect action, not warm words.

“It is amazing that no supplier knows about the behavior of their contractors, especially when they are interacting with the most vulnerable in our society.”

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2:11 The data behind the prepaid counters

Read more: How do prepaid meters work and what are the rules surrounding them?

He added: “That is why I have asked all suppliers to review all activities related to prepaid meter orders. Suppliers need to reassure us that operations for customers being moved to prepaid meters are compliant with all Ofgem rules, and until this is done, we have asked them to pause forced installations.” .

“Many have already come forward and agreed to do this until their boards are satisfied with protecting vulnerable clients. I’ve also asked them to look at their relationships with any third-party contractors and examine incentives that might lead to bad and unacceptable behavior.”

The Centrica boss said there was “no excuse” after a Times investigation showed a company used by British Gas to pursue debts, Arvato Financial Solutions, made its way into homes to fit the appliances, despite signs that children and disabled people lived there. .

Chris O’Shea also said customers did not deserve to be treated this way, and that he wouldn’t “justify it” – adding that he was conducting an independent investigation.

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10:07 said the head of British Gas, Centrica

Speaking to Sky News business presenter Ian King, he added: “I’m really sorry.”

“Obviously we made a mistake here and we’re going to fix that.”

After Centrica announced it would suspend all involuntary facilities, EDF said it had begun a review of its practices and would not seek warrants while it continues.

EDF, the UK’s second-biggest supplier, said it had applied for nearly 14,000 warrants in 2022 but had not acted on about half after contacting clients and agreeing other means of controlling arrears. It is understood that the company acted cautiously rather than in response to evidence of bad practice.

“We regularly review and update these processes and so are confident they are fit for purpose. However, we are currently reviewing them again to confirm that they are robust and to see if we can make any improvements,” she said in a statement. “.

A spokesperson for Scottish Power said: “We would not convert a customer to prepaid without prior notice and installing a prepaid meter is always a last resort, only after all other options have been exhausted to speak to and work with customers on debt repayment.

“We deplore the reported behavior and have suspended all detention facilities while a thorough investigation is conducted.”

Energy company Shell said it had extended its annual winter freeze on forced installations.

“Every year we pause installation in December and January, and we’ve extended that moratorium this winter. It’s only a last resort if a customer hasn’t contacted us for at least six months — we’ll always find a way to help if even then, if there’s any sign of On double, we will not install a prepaid meter.

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OVO Energy told Sky News it suspended “note activity” in November and has now suspended all debt recovery on prepaid meters until March.

While there is significant concern about the increase in the imposition of prepaid meters as a result of the price hike, suppliers are facing financial pressure as a result of millions of customers struggling to make payments.

It is estimated that about 40% of customers spend more than 10% of their income on energy and about 1 million energy customers are now in arrears with suppliers and do not have a plan to pay off their debts.

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