All energy firms say they will stop installing prepay meters in vulnerable customers’ homes

All energy suppliers in Britain have promised to end the installation of prepayment meters in the homes of vulnerable customers, the Government announced on Friday. 

The Department for Business, Energy and Industrial Strategy (BEIS) said that it had also asked all suppliers to set out how they are supporting their customers, how many warrants to forcefully enter peoples’ homes they have applied for and how they will make up for any wrongdoing.

Previously, companies could obtain court warrants which gave them legal rights to enter people’s homes and fit prepayment meters if customers had not paid their bills. The customers would then have to top up to continue receiving gas supplies, and risk their heating being cut off if they failed to do so. 

But announcing a change today, Energy Security Secretary Grant Shapps said: ‘All suppliers are now halting forced installations, magistrates are no longer signing off warrant applications and Ofgem are upping their game when it comes to their reviews.

Energy Security Secretary Grant Shapps (pictured) said: ‘All suppliers are now halting forced installations, magistrates are no longer signing off warrant applications and Ofgem are upping their game when it comes to their reviews’ 

The Department for Business, Energy and Industrial Strategy said that it had also asked all suppliers to set out how they are supporting their customers, how many warrants to forcefully enter peoples’ homes they have applied for and how they will make up for any wrongdoing

‘But I am angered by the fact some have so freely moved vulnerable customers onto prepayment meters without a proper plan to take remedial action where there has been a breach of the rules.

‘So, I have only received half the picture as it still doesn’t include enough action to offer redress to those who have been so appallingly treated.’

It comes after Mr Shapps said he was ‘horrified’ by the reports that British Gas sent debt collectors to ‘break into homes’ and force-fit pay-as-you-go meters on ‘vulnerable’ customers. 

He announced at the start of the month that the Government would hold meetings with the firm’s parent company Centrica to investigate what he called a ‘systemic failure’. 

Warrants forcing customers into such agreements should only be used in exceptional circumstances and never be expected of vulnerable customers, energy regulator Ofgem states. 

But an investigation by The Times allegedly determined the practice is happening more than ever. In response, British Gas announced that it has suspended applying for court warrants to enter customers’ homes and fit prepayment meters until at least the end of winter.

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 these meters.

When agents arrived at a customer’s home, a manager would allegedly encourage them to threaten customers with the police if they did not comply with the orders. 

Once a prepayment meter is fitted, customers must top up to get the gas to turn on. Regular repayments are then taken from the bank account, and the supply is cut off if there is not enough credit to cover the cost of the gas. 

‘I am horrified by the findings of this investigation and would like to thank The Times for shining a light on these abhorrent practices,’ Mr Shapps told MailOnline.

‘Switching customers – and particularly those who are vulnerable – to prepayment meters should only ever be a last resort and every other possible alternative should be exhausted. These findings suggest British Gas are doing anything but this.

‘I have asked the Energy Minister to hold a meeting with the company in the coming days, and he will be demanding answers to ensure this systemic failure is addressed.’

Energy companies are required to have ‘exhausted all other options’ before they install a prepayment meter.

Ofgem has also previously stated vulnerable people should not be forced to use prepayment meters. Vulnerability includes disability, mental health conditions, pregnancy and having children under the age of five. 

Some of the ‘vulnerable’ customers the Times reporter came across while working with Arvato Financial Solutions included a single father with three young children and a mother with a four-week-old baby whose bills have risen amid the cost-of-living crisis.

Other customers who were forcibly fitted with prepayment meters reportedly include a woman battling ‘severe mental health bipolar’, a woman who ‘suffers with mobility problems’ and a mother whose daughter is ‘disabled’ and requires an electric wheelchair. 

Elderly people were also allegedly described by some debt collectors as ‘easy targets.’

Mr Shapps (pictured January 24) says he is ‘horrified’ by the reports that British Gas sent debt collectors to ‘break into homes’ and force-fit pay-as-you-go meters on ‘vulnerable’ customers

The report comes as energy prices in Britain have rocketed this winter despite a government package of help some people are still unable to afford their bills.

Owner of British Gas, Centrica, announced the company was suspending ‘all warrant activity’ after the newspaper’s article was published. The parent company will also launch an investigation into the claims.

Centrica chief executive officer Chris O’Shea, addressing the allegations in the scathing report on Radio 4 this morning, described the actions of Arvato’s agents as ‘unacceptable’ and claimed the contractor ‘has let us down.’

Centrica chief executive officer Chris O’Shea (pictured) described the actions of Arvato’s agents as ‘unacceptable’ and claimed the contractor ‘has let us down’

He said as soon as Centrica learned of the allegations, that they ‘suspended Arvato’ and commissioned an independent report to ‘get to the bottom of what’s going on and therefore then fix it.’

Mr O’Shea further explained that Centrica currently serves 7million customers, most of whom pay their bills via direct debit. Over the past year, 20,000 customers have reportedly had meters installed under warrant.

The energy boss claims that is ‘around about the same rate you find across the industry.’

He argued that Centrica, however, faces the challenge of customers who are unable to pay their bills, alleging: ‘If somebody falls into arrears it’s not responsible for us to not do anything.’

Mr O’Shea claimed that Centrica attempts to contact debt-owing customers to ‘try to help them.’ 

He noted that the firm put together a £50million package last year, made up of voluntary contributions, to help customers who cannot pay.

He also said the firm only applies for a warrant installed prepayment meter ‘when a customer refuses to engage’ with the company, noting it ‘usually takes five to six months to go through this process.’

‘The only other option is customers who don’t pay and don’t engage, you allow them to run up unsustainable debts. No other business would do that,’ he argued. 

‘The question is how do you deal with vulnerable customers? This is not something British Gas can solve on its own. This is not something Centrica can solve on its own – and it goes beyond energy costs.’

Arvato Financial Solutions Limited responded to the allegations in a statement to MailOnline, alleging the firm ‘acts 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,’ an Arvato spokesperson said. ‘Our client is British Gas, whose requirements we also follow.

‘We treat customers with whom we come into contact with respect and assess their individual needs at the time of our visit. If there has been any verbal or any other type of misconduct by individual employees, we deeply regret it. If any inappropriate statements were made, none of these statements represent the company’s views or official guidance on how to interact with consumers.

‘Our bonus structure is solely focused on obtaining the most appropriate outcome for each individual customer, we do not prioritise or reward one outcome over another.’

Mr O’Shea claimed British Gas only applies for a warrant installed prepayment meter ‘when a customer refuses to engage’ with the company, noting it ‘usually takes five to six months for us to go through this process

Mr O’Shea, in a statement provided to MailOnline, added: ‘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.

‘Having recently reviewed our internal processes to support our prepayment customers as well as creating a new £10 million fund to support those prepayment customers who need help the most, I am extremely disappointed that this has occurred.

‘As a result, on Wednesday morning, we took a further decision to suspend all our prepayment warrant activity at least until the end of the winter.

‘More broadly, there are clearly significant challenges around affordability and unfortunately, we don’t see that changing anytime soon.

‘We need to strike a balance between managing spiralling bad debt and being aware that there are those who refuse to pay and those who cannot pay. We think Government, industry and the regulator need to come together to agree a long-term plan to address this and ultimately create an energy market that is sustainable.’

Energy regulator Ofgem also announced it would launch an investigation. 

A spokesperson previously told MailOnline: ‘These are extremely serious allegations from The Times which we will investigate urgently with British Gas and we won’t hesitate to take firm enforcement action.

‘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 recently announced a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it. We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable, and the energy crisis must not be an excuse for unacceptable behaviour towards any customer – particularly those in vulnerable circumstances.’