Ofgem outlines next steps on forced prepayment meter installations

Ofgem outlines next steps on forced prepayment meter installations

Jonathan Brearley

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 announced:

  • The terms of reference of the urgent investigation into British Gas
  • The scope of the in-depth Market Compliance Review into the issue of how PPMs are handled across the market, to include targeted engagement - facilitated through consumer groups and the Energy Ombudsman
  • A call for all suppliers to use the current pause in PPM installations to proactively check if any have been installed incorrectly and, if so, to consider removing them and offering compensation where appropriate. Ofgem will be checking actions but has made clear that suppliers should not wait to act themselves.
  • The launch of urgent work with stakeholders to look at what further protections may be needed within the rules, regulations and guidance around PPMs and seek views on other measures that could reduce the need for PPMs to be installed or switched to remotely, to conclude by the end of March 2023

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. 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 said it 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.

Share icon
Share this article: