Ofgem orders firms to pay compensation now over forced installation of pre-payment meters

It comes after British Gas subcontractors broke into customers’ homes to install the meters

Energy firms should start removing pre-payment meters now and compensate customers who had them wrongly installed, the regulator has warned.

The issue was thrust into the spotlight after a report that British Gas subcontractors broke into the homes of customers – including those with disabilities and mental health issues – to install the meters.

Ofgem has now announced a “comprehensive, independent and wide-ranging review” into British Gas’s actions.

The investigation will examine whether the firm had taken all steps required under its licence to help domestic customers with debt before installing a prepayment meter or disconnecting them.

It will also look at whether British Gas and anyone working for the supplier assessed if a customer’s “mental capacity and/or psychological state is such that installation of a prepayment meter would be severely traumatic to a customer and make their condition significantly worse”.

Further, it will investigate if those working on fitting meters for British Gas had the necessary skills – including the ability to assess the mental capacity and psychological state of the customer on the doorstep – and were “fit and proper” to enter customers’ homes.

But Ofgem’s chief executive Jonathan Brearley told BBC Radio 4’s Today programme that companies need not wait until the review is over to take action.

He said: “... I’m telling suppliers not to wait for the outcome of our reviews and to act now to check that PPMs have been installed appropriately, and if rules have been broken, offer customers a reversal of installations and compensation payments where appropriate. There will also be fines issued from Ofgem if the issue is found to be systemic.

“We are taking this issue extremely seriously and customers should feel reassured that where the rules have been broken, Ofgem will act.”

“Clearly something has gone wrong in British Gas and what we’re announcing today is a comprehensive, independent, wide-ranging review into what has happened there,” he said.

Millions of households have pre-payment meters installed (Peter Byrne/PA) (PA Archive)

He said a separate investigation launched in January will assess whether rules have been followed.

He said: “To be clear, if we find those rules haven’t been followed those companies will be forced to make redress and that’s highly likely to mean they will have to put that meter right, they will have to pay compensation and if it’s systematic there will be fines for those companies.”

Ofgem’s investigations follow the issue being thrust into the spotlight after an investigation by The Times newspaper revealed that British Gas subcontractors were breaking into the homes of customers – including disabled and mentally ill people – to install the meters.

All suppliers have subsequently committed to stop force-fitting prepayment meters in any homes, not just those of vulnerable customers, until the end of March.

On Tuesday, Ofgem set out its next steps in both the British Gas and wider prepayment meter review  “to support and protect energy customers when suppliers fit prepayment meters by force or via remote switch”.

Mr Brearley also called on all suppliers to use the pause in installations to review all of their recent forced and remotely switched prepayment installations, and consider if any need to be reversed, and compensation offered where the strict rules have not been followed.

To be clear, if we find those rules haven’t been followed those companies will be forced to make redress and that’s highly likely to mean they will have to put that meter right, they will have to pay compensation and if it’s systematic there will be fines for those companies

Jonathan Brearley, Ofgem chief executive

Mr Brearley said: “As a result of the unprecedented surge in energy prices, households across the country are facing significant energy bills and this has meant many are finding themselves in debt and being forced onto prepayment meters (PPMs).

“I am concerned about the way customers in already distressing situations are being treated when suppliers force them onto PPMs.

“That’s why, today, we have set out further details on the two investigations, one into British Gas for potential breaches that have been alleged indicating that something went very badly wrong at British Gas and the other into PPMs across all suppliers to assess whether this is an isolated case.

“The rules and regulations are clear that installing forced PPMs should only be done as a last resort and only where it is safe and practicable to do so.

“We expect suppliers to treat customers with compassion and professionalism and those executing a warrant should take into account what they find when they visit a home and pause the installation if they see a safety risk. Where this hasn’t happened, we will hold suppliers to account.

I am concerned about the way customers in already distressing situations are being treated when suppliers force them onto PPMs

Jonathan Brearley, Ofgem chief executive

Suppliers are allowed to apply to courts for a warrant to enter the home of a customer who has not been paying their bills and has not engaged with their supplier.