Ofgem will tell suppliers to suspend all warrants forcing customers to switch to prepayment meters, City A.M. understands.
The watchdog is expected to impose a temporary moratorium on forced prepayment switches, with energy firms required to scrutinise every warrant they are preparing to issue to court.
It is set to hold crunch talks with suppliers today, informing energy firms of its decision, industry sources told City A.M.
This follows allegations British Gas owner Centrica has been using debt agents to break into vulnerable customers’ homes to fit energy meters, as first reported in The Times.
Reporters from the newspaper went undercover with agents working for Arvato Financial Solutions – a company used by British Gas to pursue debts – to the home of a single father with three children.
The agents broke into the flat with help of a locksmith to install a prepayment meter.
It is reported that the locksmith said: “This is the exciting bit. I love this bit.”
Ofgem has been approached for comment.
Ofgem confirms British Gas investigation
The watchdog revealed this morning it has launched an urgent investigation into British Gas, with a spokesperson confirming the regulator “won’t hesitate to take firm enforcement action.”
Ofgem said: “It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.
“We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable. The energy crisis is no excuse for unacceptable behaviour towards any customer, particularly those in vulnerable circumstances.”
When approached for comment, Centrica boss Chris O’Shea said: “Protecting vulnerable customers is an absolute priority and we have clear processes and policies to ensure we manage customer debt carefully and safely. The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.”
Centrica has also announced it will pause all forced installations of prepayment meters until at least the end of winter.
Earlier this month, Ofgem revealed it has begun a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences.
This followed calls from Fuel Poverty Coalition, which represents sixty anti-poverty charities, for the practice of switching vulnerable customers on to prepayment meters to end.
The group is concerned that magistrates courts have been “rubber stamping” warrants to install prepayment, noting freedom of information requests which revealed 187,000 applications were made in the first six months of 2022.
Business Secretary Grant Shapps contacted suppliers earlier this month, urging them to stop forcing customers on to prepayment meters and warned he would “name and shame” suppliers who were doing “nowhere near enough” to help vulnerable customers.