Energy companies will not be allowed to restart the forcible installation of prepayment meters in the homes of “vulnerable” and other customers until they can prove they are complying with a new code of practice, the regulator has told MPs.
Jonathan Brearley, chief executive of the energy regulator Ofgem, told MPs that the watchdog was “deeply concerned” by widespread reports about the behaviour of energy companies such as British Gas.
He said: “We are very clear vulnerable customers need to be treated fairly and that means vulnerable customers need to be treated with respect.”
He was speaking to a joint hearing of the business, energy and industrial strategy (BEIS) committee and the justice committee.
It followed media reports – initially in the i newspaper and then The Times – about the forced installation of pre payment meters (PPMs) by energy companies.
A four-month investigation by i found that courts were processing hundreds of warrants in just minutes, allowing debt agencies working for energy suppliers to forcibly fit the meters, despite concerns over insufficient checks on the “vulnerability” of disabled and other customers.
Lord Justice Edis, the senior presiding judge of England and Wales, told magistrates’ courts last month to stop listing applications from energy companies for the warrants.
And Ofgem launched a review investigating the rapid growth in prepayment meter installations following the “extremely serious allegations” in The Times about forced installations by British Gas.
The industry had been told it could not restart forced installations until the end of this month, but Ofgem now says they will not restart until energy companies can prove they are treating disabled and other customers fairly.
Brearley told the MPs: “We are deeply concerned about, not only the reports in The Times, but the reports that have been appearing for some time around the behaviour of energy companies with regards to the forced installation of pre-payment meters.”
He said Ofgem had been clear through the last year of huge energy price rises that the energy sector’s focus “needs to be on its most vulnerable customers”.
He said Ofgem had launched a review in January to look at the systems, processes and outcomes for customers who have had PPMs installed.
A new code of practice is now expected by the end of this month.
Brearley said forced installation of PPMs would only restart “when and if they can establish they are acting in accordance with that new code of practice”.
Labour’s Darren Jones, chair of the BEIS committee, pointed out that Ofgem had announced action on the issue as far back as 2018 and promised then to “take tough action if the suppliers fail to treat their vulnerable customers in the right way”.
Brearley claimed Ofgem was now working more proactively.
Chris O’Shea, chief executive of Centrica, which owns British Gas, had earlier been asked by the committee if its agents breached rules by breaking into the homes of disabled and other “vulnerable” people to forcibly install PPMs.
Among the cases of forcible installation reported by The Times and raised by the committee this week were those of a woman with mental distress, and a partially-sighted woman with arthritis.
But O’Shea said he did “not have the details” of either case.
He said: “It’s sometimes not possible to identify a vulnerability because customers will simply refuse to engage. If we identify a vulnerability, we don’t install PPMs.”
But Jones said: “All of the cases that have been reported, and these are only some of them, are to me a very clear breach of your licence conditions.”
O’Shea said he was waiting for British Gas’s own investigation before he could conclude if the incidents reported by The Times were “isolated or systemic”.
Asked if British Gas would compensate the victims of its actions, he said: “If we identify that we acted incorrectly we will make that right.
“I can only answer that question when we have the results of that investigation.”
But he said that, since The Times allegations were published, 300 customers have written to British Gas to say they believe they were wrongly moved onto PPMs.
British Gas forcibly installed more than 20,000 PPMs last year after obtaining warrants from magistrates’ courts, the committee heard.
Labour’s Karl Turner, a member of the justice committee, said that between July 2021 and December 2022, magistrates granted a “staggering” 536,139 PPM warrants to agents acting for energy companies and refused just 75.
Many of the warrants that are granted do not end up with PPMs being installed, the MPs were told.
Robin Cantrill-Fenwick, a former magistrate, told the committee that the process of obtaining the warrants had altered in favour of the energy companies in 2019, making it much harder for magistrates to reject a PPM warrant.
Some magistrates’ courts were dealing with as many as 1,000 applications to forcibly install PPMs in a single day, he said.
The applications were dealt with by magistrates over the phone, and the occupants of the homes had no idea when or at what court the applications were being dealt with.
Cantrill-Fenwick eventually resigned as a magistrate in protest at the changes.
He said: “My strong suspicion is that there were conversations around how we balance the interests of an efficient process in the courts with an efficient process for the energy companies, and somewhere in that the interests of the person, the occupier, got lost.”
He said he believed it had been presumed that the energy companies could balance their interests and those of the occupier “and they would be the people who would exercise restraint on whether or not to put a warrant application in”.
But he said that that expectation “has been shown to be quite naïve”.
He told the committee that nobody in the justice system “has accepted wrongdoing” for what had happened with the PPM warrants.
He said this “poses a very real danger that when the media attention moves on, the parliamentary attention must inevitably move on, [and] this snaps back to the way it was before, which would be a tremendous injustice”.
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