Energy regulator Ofgem has called on energy suppliers to use the pause in prepayment meter installations to consider whether any recent forced installations should be reversed.
Ofgem, which is also investigating British Gas due to forced prepayment meter installations, called on suppliers to use this pause to rectify some of the wrongly installed meters in vulnerable customers’ homes. The regulator also called for compensation to be awarded from any wrongdoing.
The firm stated it will be “checking actions” but emphasised that energy suppliers should not wait to act themselves.
Ofgem has additionally laid out the scope of its market compliance review. The scope of this investigation will cover governance, policies, risk management, processes, controls, management information, training programmes and assurance.
Under the investigation into governance, Ofgem will explore how boards and senior leaders are providing direction and oversight, leading to decision-making with respect to remote switching to prepayment meters and installation of prepayment meters under warrant.
Ofgem will also investigate policies including what suppliers currently have in place for remotely switching a smart credit meter to a prepayment mode and fitting a prepayment meter under warrant.
A risk management process which includes the identification of vulnerability amongst consumers will also be explored. This will also include how suppliers assess and control threats to customer experience and business operations. It will also include the mechanisms in place to report vulnerability.
“I am concerned about the way customers in already distressing situations are being treated when suppliers force them onto prepayment meters. 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 prepayment meters across all suppliers to assess whether this is an isolated case,” said Jonathan Brearley, CEO of Ofgem.
“I’m telling suppliers not to wait for the outcome of our reviews and to act now to check that prepayment meters 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.”
This is the latest development in the investigation by Ofgem into forced prepayment meters after energy security secretary Grant Shapps called for an investigation into the issue.
In late January, Shapps declared he had written to each energy supplier in a bid to prevent prepayment meters being forcibly installed at homes.
Following this intervention, the government confirmed that all energy suppliers had committed to ending the forced installation of prepayment meters in vulnerable customers’ homes.
Prepayment meter installations had risen considerably amid the energy crisis. But due to soaring energy prices, many on prepayment meters have been unable to pay for energy and thus had their supply cut off.
Citizens Advice indicated that around 3.2 million had been affected in 2022.