Grant Shapps tells Ofgem to toughen up over prepayment meter scandal

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The business secretary has told the energy market regulator to toughen up on suppliers in the wake of the prepayment meter scandal.

Grant Shapps accused Ofgem of “having the wool pulled over their eyes” by taking at face value what the energy company bosses were telling them and not listening to customers.

He said he was giving the companies a deadline of Tuesday to report back on what action they would be taking – including compensation – with regard to customers who may have had prepayment meters wrongfully installed in their homes.

It follows an investigation by the Times that revealed how vulnerable customers – including disabled and mentally ill people – were being forced by British Gas on to the pay-as-you-go meters, or have their gas switched off.

An undercover reporter for the newspaper worked for debt-collecting contractor Arvato Financial Solutions and accompanied agents who used court warrants to gain entry into customers’ homes to force-fit the meters.

In a statement, Shapps said: “I am appalled that vulnerable customers struggling with their energy bills have had their homes invaded and prepayment meters installed when there is a clear duty on suppliers to provide them with support. They need to refocus their efforts on their consumers, the British public, who are at the receiving end of this abhorrent behaviour.

“I’m also concerned the regulator is too easily having the wool pulled over their eyes by taking at face value what energy companies are telling them. They need to also listen to customers to make sure this treatment of vulnerable consumers doesn’t happen again.”

In response, Ofgem said it shared Shapps’ “shock” at the findings of the Times investigation and that it had ordered British Gas to cease all warrant activities until it can demonstrate compliance with its standards and requirements.

“Our compliance reviews were launched to assess and drive up standards across the industry,” it said. “Companies are legally required to submit an honest representation of the facts and we required assessments to be signed off by their boards. It is an extremely serious matter for any licensee to provide misleading or purposefully inaccurate information as part of these reviews.

“What is clear, as the secretary of state has laid out, is that the picture presented by companies may not accurately reflect what is experienced by customers on the ground. Therefore, further reviews will cross-examine what we have had reported to us with direct reports from customers and wider stakeholders, and potentially those involved in delivery of services.”

Earlier this week, Ofgem ordered all domestic energy companies to suspend the system of forcibly installing prepayment meters.

Companies can move customers who are behind on their energy bills on to more expensive prepayment meters, although the rules are supposed to ensure that vulnerable customers are not forcibly moved.

The shadow business secretary, Ed Miliband, accused Shapps of repeatedly failing to take action over prepayment meters.

“Grant Shapps is the do-nothing business secretary, who has sat on his hands in the face of the scandal of forced installation of prepayment meters, and simultaneously waves through energy companies making record profits at the expense of the British people,” he said.

“Now, even after the scandal at British Gas and the millions disconnected by the back door, he still won’t adopt Labour’s call for a total and ongoing ban on the forced installation of prepayment meters until there is wholesale reform of a discredited, rotten and callous system.”