What are the accusations against British Gas over prepayment meters?

Company criticised for allegedly forcing ‘vulnerable’ customers to accept pay-as-you-go devices

British Gas has announced it will stop applying for court warrants to enter customers’ homes to fit prepayment meters (PA)

Energy giant British Gas is under pressure to explain how it will compensate “vulnerable” customers who were subjected to debt collectors forcibly entering their homes to install prepayment meters, following damaging allegations about the practice.

An investigation by The Times revealed that customers of the company, including disabled and mentally ill people, had been forced onto the pay-as-you-go meters after falling behind on their monthly bill payments, the only alternative being to have their gas switched off altogether.

The devices in question ensure the provider gets paid because they compel customers to pay before using their energy, rather than responding to a bill after the fact, by topping up a smart card with credit.

This is then fed into the wall-mounted unit and grants the household power until the credit is spent, at which point they will need to load more money onto the card or go without electricity and gas, effectively “self-disconnecting”.

The switch to this payment method can be made remotely if the individual in question has a smart meter but, if not, suppliers or debt collection agencies acting on their behalf have been able to obtain court warrants to enter homes, with some magistrates reportedly granting hundreds of such requests in one sitting.

The Times investigation involved sending an undercover reporter to work for one of these debt-collecting contractors, Arvato Financial Solutions, and accompany its agents on jobs, recording video and audio of the assignments and witnessing them use warrants to gain entry into customers’ homes to force-fit the meters, allegedly ignoring evidence that children or disabled people were clearly living at some of the properties visited.

The newspaper reported that British Gas customers who had had the meters fitted by force included a woman in her 50s described in job notes as “severe mental health bipolar” and a mother whose “daughter is disabled and has a hoist and electric wheelchair”.

According to guidelines set by the regulator Ofgem, disabled people or those with long-term health conditions are supposed to be protected from being forced onto the meters to prevent such circumstances arising such as being unable to refrigerate vital medication.

The Times also alleged that the company’s employees were incentivised with bonuses to fit the devices, encouraging unscrupulous practices.

Ofgem has already responded to the revelations by ordering energy companies to suspend the practice.

“We won’t hesitate to take firm enforcement action,” it said in a statement.

“It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.

A British Gas prepayment meter (Peter Byrne/PA)

“We have launched a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it.”

Centrica, which owns British Gas, said in a statement of its own that “all warrant activity” had been suspended and that protecting vulnerable customers was an “absolute priority”.

Chris O’Shea, its boss, said he was launching an independent investigation, telling Sky News he felt “disappointed, livid and gutted” and adding that there was “no excuse” for what had been uncovered.

For its part, Arvato Financial Solutions told The Times it “acts compliantly at all times in accordance with the regulatory requirements” and said the findings did not represent its views or reflect its official guidance to employees on how to interact with customers.

“If there has been any verbal or any other type of misconduct by individual employees, we deeply regret it,” a spokesperson told the newspaper.

In Westminster, business secretary Grant Shapps branded the revelations “outrageous” while energy minister Graham Stuart has asked Centrica to urgently outline “redress” for “mistreated customers”.