Centrica holds forced instalment of pre-pay meters after backlash

UK power supplier Centrica has apologised for the “deeply disturbing” behaviour of a third-party contractor alleged to have broken into vulnerable customers’ homes to install pre-pay energy meters on its behalf, and suspended the contentious practice of forced instalments.

Other large retail energy suppliers, including Eon, are expected to follow suit, according to people familiar with the matter, effectively freezing a practice that has risen during the energy crisis.

Meanwhile, regulator Ofgem is expected to request that all companies pause the practice while they carry out a review, according to people familiar with provisional discussions with the industry. Ofgem did not respond to requests to comment.

An Eon spokesman said it was “suspending installation of prepayment meters under warrant until the end of the winter”, adding that this included switching smart-meter users to pay-as-you-go “unless a customer requests it”.

Centrica chief executive Chris O’Shea said the owner of British Gas had immediately suspended work with Arvato Financial Solutions after an undercover reporter from The Times witnessed the contractor’s agents breaking into the home of a single father of three young children to fit a prepayment meter.

The investigation, which also unearthed other evidence of forced instalments in the homes of vulnerable customers, has shone a further spotlight on the practice of fitting pre-pay meters under court warrants. Ofgem rules stipulate suppliers cannot forcibly fit a pre-pay meter for people in “very vulnerable situations”.

Citizens Advice, the consumer charity, has called for an immediate ban on the forced installations of such meters by all energy companies until new customer protections are introduced.

Most customers pay for their energy after it has been used, commonly by direct debit, but consumer groups have detected a rise in suppliers forcing households on to more expensive prepayment meters if they fall into arrears.

Ofgem is investigating the practice, while business secretary Grant Shapps warned suppliers last month that forced instalments should only be a “last resort”.

Shapps has summoned Centrica for a meeting with energy minister Graham Stuart following the publication of The Times’ investigation. Ofgem said it was launching an urgent investigation into Centrica following the “extremely serious” allegations and would not hesitate to take “firm enforcement action” against the company.

Centrica said it had suspended forced installation until “at least” the end of the winter.

Speaking on Radio 4’s Today programme on Thursday, O’Shea called the practices unearthed by the investigation “completely unacceptable” and “deeply disturbing”, adding that “there’s nothing that can be said to excuse” the actions reported in The Times.

Centrica had commissioned an independent report so it could get to the “bottom of what went wrong”, O’Shea said. The third-party contractor had “let us down”, O’Shea said, but he conceded that he was ultimately accountable.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, a group of charities, local authorities and trade unions, said the government also needed to investigate the role of the courts in issuing warrants to energy suppliers. Government figures show more than 536,000 warrants were issued between July 2021 and the end of December 2022.

A separate investigation by the i newspaper in December alleged that warrants were sometimes being signed off rapidly in large batches and that magistrates often had little oversight of customers’ vulnerability.

“What we’re really concerned with is the role of the courts in all of this and that’s [outside] Ofgem’s remit,” said Francis. “That’s why we feel there needs to be something more comprehensive.”

Gillian Cooper, head of energy policy at Citizens Advice, said it was “truly shocking to see the extent of bad practices amongst some energy suppliers”.

“Our frontline advisers know only too well the desperate situations so many struggling customers have found themselves in,” she added. “Time and time again we have called for a ban on forced prepayment meter installations until new protections for customers are brought in.”

The investigation comes ahead of Centrica’s full-year results this month when it is expected to report a near-eightfold rise in earnings. Its gas production, energy trading and nuclear power divisions have benefited from soaring commodity prices in the wake of Russia’s assault on Ukraine.

Arvato said it acted “compliantly at all times in accordance with the regulatory requirements in the areas in which we are operationally active. In doing so, we respect and adhere to the regulations of Ofgem as well as other regulatory bodies.”

But it added: “If there has been any verbal or any other type of misconduct by individual employees, we deeply regret it.”

Source link

Comments are closed, but trackbacks and pingbacks are open.