Energy firms told to stop force-fitting prepayment meters

Energy companies have been asked by the industry regulator Ofgem to suspend the forced installation of prepayment meters.

It comes after The Times found debt agents for British Gas had broken into vulnerable people's homes to fit meters.

Ofgem has asked all suppliers to review the use of court warrants to enter the homes of customers in arrears.

It said firms must get their "house in order".

Jonathan Brearley, the regulator's boss, said he had ordered the review into pre-payment meters to "uncover poor practice" and that he would not hesitate to take the "strongest action in our powers" where needed.The regulator does not have the power to enforce a total ban.

There are more than four million UK households on prepayment meters. Rules state:

• Customers pay for their energy in advance, either through an account or using a top-up card. Emergency credit is available

• The cost per unit of energy is higher than direct debit, because of the costs involved for suppliers. Sometimes it is the only option for people already in debt to a supplier

• Some customers who do not pay regular bills can be moved to prepayment, either remotely on a smart meter, or physically under the power of a court warrant

• Suppliers are required to have exhausted all other options before installing a prepayment meter, and should not do so for vulnerable customers, including the elderly and those with young children

The undercover investigation by the Times revealed how agents working for Arvato Financial Solutions on behalf of British Gas had forced their way into the home of a single father-of-three to install a prepayment meter.

On Thursday, Chris O'Shea, the boss of Centrica which owns British Gas, told the BBC: "There is nothing that I can say that can express the horror I had when I heard this, when I read this. It is completely unacceptable.

"The contractor that we've employed, Arvato, has let us down but I am accountable for this."

Mr Brearley said: "It is astonishing for any supplier not to know about their own contractors' behaviour, especially where they are interacting with the most vulnerable in our society."

But earlier this week, the Ofgem boss said he was in favour of forcing some customers onto prepayment meters.

He told MPs on Tuesday: "There is something I will say that may not be popular here but there are a group of customers who can afford to pay their bills, who choose not to.

"And so everyone is agreed in those circumstances the mandatory switch to a prepayment meter is a reasonable response to families who can afford to pay."

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British Gas has said it will suspend forcefully installing prepayment meters until at least after the winter. Arvato Financial Solutions has not commented.

A spokesman for British Gas said it had about 1.5 million customers on prepayment meters and last year had executed around 20,000 prepayment installs with a warrant. It is the country's largest supplier with 7.26 million customers.

EDF, Britain's second largest supplier, has also confirmed it is suspending the forced installation of prepayment meters and reviewing its practices.

Ovo Energy said it suspended its warrant activities in November, and Octopus Energy said it was "not installing any at the moment" and rarely had done.

'It felt violating'

Jane, who did not want us to use her surname, came home to her recently-bought house in Poole, Dorset, in 2014 to find that someone had been in her home, installed a prepayment meter and left a letter in the kitchen.

Jane said the "horrid" experience had happened just after she had lost her unborn child at 17 weeks. She said she was mentally "broken".

The now 46-year-old said she had been sent letters addressed to a previous occupant and had posted them marked 'return to sender'. Jane added she was signed up to a direct debit plan with her energy provider, and had not missed a payment.

She called the firm and said it transpired that it had been the previous tenant who had been in arrears. She said a neighbour with a spare key was persuaded to let the installers in.

Jane said her energy provider had apologised on the phone for the mistake, removed the prepayment meter and credited her account with £45.

"It feels violating to have someone come into your house like that. It was so scary," she said. "You could sense someone had been in. The house was freezing cold."

Ofgem said energy suppliers had been asked to examine their relationships with third-party contractors and to look at "incentives that could give rise to poor and unacceptable behaviours".

In the case of British Gas, Mr Brearley said: "We are opening a comprehensive investigation into British Gas on this issue and we will not hesitate to take the strongest action needed."

Graham Stuart, the minister for energy and climate, said British Gas should "hold their heads in shame".

He told the BBC he had met all energy suppliers last week to talk about how to improve looking after vulnerable people "because there are clear rules and they have obviously not been followed".

But Caroline Flint, former shadow energy secretary who now chairs the Committee on Fuel Poverty, said the issue of forced installation of prepayment meters had been raised with the government last year following a surge at the end of summer.

"It is quite clear that the rules around seeking warrants for these forced installations make it very clear that they shouldn't be done where there are vulnerable people living in households, and they just haven't been followed," she told the BBC.

While Ms Flint welcomed the suspension, she said it was "right to consider whether or not forced installation of meters should happen at all".