Ofgem ‘asleep at the wheel’ while suppliers fitted prepayment meters

Britain’s energy regulator has been accused of being “asleep at the wheel” in its monitoring of electricity and gas suppliers found to have been using court warrants to install prepayment meters in customers’ homes.

The behaviour of energy companies has come under fresh scrutiny following allegations on Thursday that debt collection agents acting on behalf of British Gas, the biggest supplier, broke into the homes of vulnerable customers to fit expensive prepayment devices.

It is estimated that more than 4mn customers use prepayment meters. Critics say their use has exacerbated the cost of living crisis and added to the squeeze on vulnerable people. Typically, pre-pay customers pay more for their energy than those who pay by direct debit and they have access to fewer tariffs.

Energy experts on Friday questioned Ofgem’s role in overseeing energy groups, after it twice ranked British Gas — which serves about 7.5mn consumers — top for supporting households in difficulty with their energy bills or deemed vulnerable.

In its first review published in September, the watchdog said British Gas was the only supplier to have had “no significant issues” with its support for customers in payment difficulty.

In its second review into support for vulnerable households, published in November, Ofgem gave British Gas and six rivals the top rating of only “minor weaknesses”.

The regulator on Thursday ordered British Gas to immediately suspend forcibly fitting prepayment meters in customers’ homes following an investigation by The Times newspaper.

It also asked other suppliers to desist from such activities pending probes into the wider market and British Gas, which has apologised for “completely unacceptable” behaviours.

Ofgem rules stipulate that suppliers can neither force-fit a prepayment meter for people in very vulnerable situations nor use warrants on people who would “find the experience very traumatic”.

But experts on Friday pointed out that fuel poverty voice campaigners had voiced concern last summer, citing the sharp rise in the number of court warrants sought by suppliers and a Citizens Advice call in September for a moratorium on installations.

Adam Bell, head of policy at the consultancy Stonehaven and former head of energy strategy at the business department, said the regulator had been “asleep at the wheel”.

“Realistically Ofgem should have started monitoring [prepayment meter installations] at the outset of the [energy price] crisis,” he said.

“What they should have done is notice the numbers creeping up, asked if that would mean anything for the court system — on which getting a warrant for forcible entry relies — and if that meant anything for the quality of decisions that were being made.”

Simon Francis of the End Fuel Poverty Coalition, a group of trade unions, charities and local authorities, said Ofgem had taken eight months to act on a problem that had “ramped up” and “had a damaging impact on countless lives”.

Ofgem insisted it always acted “on evidence given to us by the public, whistleblowers, consumer groups and referrals from the independent energy ombudsman”. But it said it lacked “the legal power, remit or finances to set up undercover investigations into frontline installation teams”.

It added that its probes would “examine in detail” the “critical issue” of forced prepayment meter installation.

Caroline Flint, a former Labour minister who is now an adviser to the government on fuel poverty, called for a review into the practice of forcibly fitting prepayment meters.

“I think energy companies have been given the benefit of the doubt on this for too long and now I think it is right to have this moratorium,” she told the BBC on Friday. “It is [also] right to consider whether or not forced installation of meters should happen at all.”

Fuel poverty charities have suggested the government should examine the magistrates courts’ role in issuing warrants to energy companies, after the i newspaper alleged they were sometimes granted in “private back rooms”.