British Gas was aware of every visit Arvato Financial Services took to people’s homes for forced prepayment installations, confirmed Debbie Nolan, managing director of the third party service.
She told a leading committee of MPs in Westminster yesterday that energy companies always have to greenlight whether to go forward with a visit after a warrant is approved.
Nolan said: “We don’t install prepayment meters, the energy provider does. We arrange for the warrant application at that stage in the process. At a visit, our agent will have the warrant and they will be accompanied by an engineer from the energy provider – and a locksmith the provider has contracted as well.”
Arvato has worked with British Gas since 2013, and also has been contracted to Ovo, Eon UK, EDF and Scottish Power – with Nolan revealing there was “no significant difference in the process” from supplier to supplier.
Between January 2019 and December 2022, Arvato was granted almost 300,000 right of entry warrants on behalf of energy suppliers.
Nolan was speaking to the BEIS Select Committee following reports in The Times that Arvato had forced entry into vulnerable people’s homes, after being hired by British Gas to install prepayment meters.
Vulnerable energy users are exempt from forced prepayment meters installations under the law.
Chris O’Shea, chief executive of British Gas owner Centrica, confirmed to the panel of politicians in a later session that his company had suspended its relationship with Arvato following The Times investigation.
While British Gas knew about every visit, he said the supplier was unaware Arvato was imposing prepayment meters on vulnerable customers, as alleged by the newspaper.
He also argued it can be very difficult to establish contact with customers and establish whether they are vulnerable.
O’Shea said: “Sometimes it’s not possible to identify a vulnerability because customers refuse to engage. If we identify a vulnerability, we don’t install a prepayment meters.”
The energy boss revealed British Gas makes on average 24 attempts to contact a customer, before applying for warrants – and that the number of prepayment meters has gone down over the past four years.
O’Shea was not prepared to confirm if British Gas’ protocols had been breached until the outcome of an internal investigation – which would establish if the media reports reflected an isolated incident or systemic issue.
He explained: “The first potential breaches came to my attention in the media reports, that will go to audit and risk committee, but as there have been no established breaches there has been no report to the best of my knowledge.”
Ofgem scrambles to reform energy market after prepayment meter scandal
British Gas is home to 9m households, making it the largest supplier in the UK, with 1.2m prepayment customers.
Alongside its internal review, the company is under investigation by watchdog Ofgem, which is also conducting a wider market review into the use of prepayment meters.
As it stands, the practice of forced installations under warrant has been suspended across the energy sector, as first revealed by City A.M.
Ofgem boss Jonathan Brearley revealed in a later session the watchdog has extended the ban beyond next month.
The ban will now lift “only when and if” firms follow Ofgem’s new code of practice, he said.
Jonathan Brearley was “deeply concerned” by firms forcing prepayment installations on vulnerable customers.
He warned Centrica that the picture it had from “British Gas and Arvato did not match” the reality households are facing.
However, he did argue suppliers needed a pathway to profitability following the energy crisis – and that the margins within the energy sector as it stands were very tough on retailers.
“The deal with the industry is we will continue to amend price cap and monitor financial resilience, but the industry as a whole needs to improve its standards,” Brearley said.