Energy suppliers have agreed to end the forced installation of prepayment meters in vulnerable customers’ homes, the government has said.
The move comes as an investigation revealed debt collectors working for British Gas forced their way into the homes of vulnerable customers.
An undercover investigation by The Times claimed a company used by British Gas to pursue debts, Arvato Financial Solutions, had forced their way into homes to fit the devices, despite signs children and disabled people were living there.
The paper also alleged that Arvato Financial Solutions employees were incentivised with bonuses to fit prepayment meters.
Last week, the energy regulator Ofgem asked suppliers to suspend the forced installation of prepayment meters and review their processes for dealing with customers who have fallen into arrears.
Grant Shapps, then business secretary and now energy secretary, also wrote to energy bosses insisting they revise their practices and improve action to support vulnerable households and make sure installing prepayment meters is a genuine last resort.
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As a response, all energy suppliers have now committed to ending the forced installation of pre-payment meters, the government has said.
Meanwhile, an Ofgem executive has warned that British Gas will have to pay compensation to customers with force-fitted prepayment meters if an investigation confirms they were incorrectly installed.
Akshay Kaul, Ofgem’s director for infrastructure and security of supply, said customers would be able to request that their prepayments are removed and claim compensation, depending on the outcome of the regulator’s investigation.
“If prepayment meters have been incorrectly installed, that is not in compliance with the rules,” Mr Kaul told LBC.
“If that is what the investigation ultimately concludes then consumers have a right to have them uninstalled if that is what they wish and they have a right to seek compensation and that is what we will be asking any suppliers that are in that situation to do.”
Probed as to whether energy suppliers would be “asked” or “told” to compensate customers, Mr Kaul replied: “If there are cases where there are inappropriate installations of prepayment meters, and those customers wish to go back to a standard meter, that is their choice and of course we will want suppliers to respect the wishes of those customers.
“To the extent that there is harm that has been caused to consumers then a standard enforcement principle is that we want suppliers to compensate, to offer redress to consumers for the harm that has been caused.”
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Mr Shapps said: “People will have understandably been shocked and appalled at how vulnerable people’s homes have been invaded and prepayment meters installed against their wishes – and suppliers are only at the beginning of correcting this abhorrent behaviour.
“Since those reports were published, I have demanded answers from suppliers, and Ofgem: all suppliers are now halting forced installations, magistrates are no longer signing off warrant applications and Ofgem are upping their game when it comes to their reviews.
“But I am angered by the fact some have so freely moved vulnerable customers onto prepayment meters, without a proper plan to take remedial action where there has been a breach of the rules. So, I have only received half the picture as it still doesn’t include enough action to offer redress to those who have been so appallingly treated.
“This is simply not good enough and absolutely needs to be addressed by Ofgem’s review – I want to see plans from suppliers actually acted upon – and customers given the service they have a right to expect.”
The government said Mr Shapps “will be keeping a watchful eye on the activities of suppliers to make sure this doesn’t happen again”.
But shadow energy secretary Ed Miliband accused the government of “being asleep at the wheel during this crisis” and accused Mr Shapps of wanting “credit for doing the bare minimum”.
“We need to see the end of the prepayment penalty and we need a complete ban on the forced installation of meters until there is a fundamental reform of this rotten, discredited system,” he said.
Mr Miliband added: “Only Labour can fix our broken energy system – ending the prepayment meter scandal, stopping bills going up this April with a proper windfall tax, and taking the long term action we need to make Britain a clean energy superpower.”
Since the undercover investigation, British Gas announced that it has stopped force-fitting prepayment meters and apologised for the way some customers were treated.
Centrica, the owner of British Gas, said in a statement that “all warrant activity” had been suspended and that protecting vulnerable customers is an “absolute priority”.
Warrant activity involves the company applying to the court for a warrant to install a prepayment meter
Centrica boss Chris O’Shea has also launched an independent investigation, telling Sky News’ business presenter Ian King he felt “disappointed, livid and gutted” and that “there is no excuse” for what the undercover investigation uncovered.