This new review will now build on these previous MCRs, which examined how customers struggling with bills are treated, the support for vulnerable customers, and how direct debits are set, examined and handled.
Britain’s energy regulator, Ofgem, has set out the next steps in the British Gas investigation and Prepayment Meter (PPM) review to support and protect energy customers when suppliers fit PPMs by force or via remote switch.
Ofgem CEO, Jonathan Brearley, has also called on all suppliers to use the pause in installations (lasting until 31 March 2023) to review all of their recent forced and remotely switched PPM installations, and consider if any need to be reversed, and compensation offered where the strict rules have not been followed.
The regulator has today announced:
Jonathan Brearley, CEO of Ofgem, 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.
However, 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.”
Ofgem issued a Provisional Order to British Gas at the start of this month temporarily banning them from doing any forced installation or remote mode switch. This followed undercover reporting from The Times which alleged appalling behaviours from the company in the treatment of customers when forced PPMs were being installed, and enough doubt was raised of potential rule breaches. Ofgem also made an agreement with all other suppliers to voluntarily suspend forced installations of prepayment meters and remote switching of smart meters to prepayment mode until 31 March 2023.
Ofgem has also set out the scope of a new in-depth Market Compliance Review (MCR), announced in January, focused on forced installation and remote mode switch. Alongside this, Ofgem is also bringing together suppliers, consumer groups and charities to look at what further protections could be introduced within the rules, regulations and guidance around PPMs and seek views on other measures that could reduce the need for PPMs to be installed.
The PPM market-wide review will also conduct targeted engagement - facilitated through consumer groups, the Energy Ombudsman and customer feedback. Ofgem will be seeking views from all interested parties on the licence conditions and guidance that covers the use of PPMs, including identification of vulnerabilities by suppliers, safe and reasonably practicable rules and processes in place for installing or switching customers to PPM, as well as asking for views on other measures that could reduce the need for PPM to be installed in the first place.
Ofgem wants to see a market where no customers are forced onto PPMs if it is not safe for them and where suppliers consistently protect their vulnerable customers. This includes suppliers reliably identifying any relevant vulnerabilities and having processes and practices for installation of (or switch to) PPMs that are fair, clear and effective. Ofgem’s intent is that the regulatory rules and guidance should provide a robust foundation for these outcomes.
Previous market-wide reviews
Previous market-wide reviews by the regulator have driven industry-wide improvements in, among other things, the way customer direct debits are handled and set, as well as engaging with all suppliers on concerns which included monitoring risk of vulnerable customers, strengthening governance around processes and controls and making improvements around their Priority Service Registers.
The last market review into customer service found that Ofgem’s findings tallied with what customers themselves were reporting, with early indications from a recent Energy Satisfaction survey of 3,000 domestic energy consumers showing that in November-December 2022, overall customer satisfaction with energy suppliers was amongst the worst ever seen since tracking began in 2018.
This new review will now build on these previous MCRs, which examined how customers struggling with bills are treated, the support for vulnerable customers, and how direct debits are set, examined and handled. Ofgem also flagged the risk of remote mode switching, and wrote to suppliers in November 2022 on this issue.
All the action taken from all the Market Compliance Reviews so far can now be seen collectively.
