Ofgem tells energy suppliers to remove prepayment meters that were wrongly force-fitted

Ofgem, the UK’s energy regulator, has instructed energy suppliers to take immediate action and uninstall prepayment meters (PPMs) that have been wrongly force-fitted, as well as compensate customers affected by the practice.

The regulator has also warned suppliers not to wait for the outcome of its review into the issue, but to take responsibility and act now.

The announcement follows allegations made by The Times newspaper that British Gas forced vulnerable customers onto prepayment meters, including a woman with bipolar disorder, a partially sighted woman with mobility problems, and a mother with a disabled daughter.

The undercover investigation also revealed that debt agents hired by British Gas had broken into the home of a single father with three young children and switched it to a prepayment meter.

British Gas suspended the practice of force-fitting prepayment meters and launched an investigation into the allegations.

Ofgem subsequently launched an urgent investigation into the company, as well as an in-depth Market Compliance Review into how PPMs are handled across the energy market.

In response to the investigation, Ofgem’s CEO, Jonathan Brearley, has called on all energy suppliers to use the pause in PPM installations, which is in effect until 31 March 2023, to review all of their recent forced and remotely switched PPM installations.

Brearley has urged suppliers to consider uninstalling any wrongly force-fitted PPMs and compensate affected customers.

“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,” said Brearley.

“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.”

Ofgem has also launched work with stakeholders to consider what further protections may be needed within the rules, regulations, and guidance around PPMs. The regulator has stated that it will be seeking views from all interested parties on the licence conditions and guidance that covers the use of PPMs.

The regulator’s instructions come as many households across the UK face significant energy bills and find themselves in debt.

With this context in mind, the regulator’s action shows its commitment to protecting energy customers and ensuring that energy suppliers operate responsibly.

It remains to be seen how energy suppliers will respond to Ofgem’s instructions.

However, the regulator has made it clear that it will be monitoring actions and will issue fines if necessary.

The regulator has today 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