Energy regulator Shapps raps over prepayment meter scandal

Business Secretary Grant Shapps has told the energy market regulator to crack down on suppliers in the wake of the prepayment meter scandal.

Mr Shapps accused Ofgem of “pulling the wool over their eyes” by listening to what energy company bosses were telling them and not listening to customers.

He said he was giving a deadline of Tuesday for the companies to report back on the measures they would be taking – including compensation – for customers who may have had prepaid meters incorrectly installed in their homes.

It follows an investigation by The Times which revealed how British Gas forced vulnerable customers – including the disabled and mentally ill – onto pay-as-you-go meters, or whose gases were turned off.

An undercover reporter for the newspaper worked for debt collection contractor Arvato Financial Solutions and escort agents who used court warrants to enter customers’ homes to install the meters.

In a statement, Mr Shapps said: “I am delighted that vulnerable customers struggling with their energy bills have had their homes invaded and pre-paid meters installed when suppliers have a clear duty to support them.

“They need to refocus their efforts on their consumers, on the British public, who are on the receiving end of this ugly behaviour.

“I am also concerned that it is too easy for the regulator to pull the wool over their eyes by paying attention to what energy companies are telling them.

“They must also listen to customers to ensure that this treatment of vulnerable consumers does not happen again.”

Business Secretary Grant Shapps

Business Secretary Grant Shapps has given businesses until Tuesday to respond (Stefan Rousseau/PA)

In response, Ofgem said it was “shocked” by Mr Shapps at the findings of The Times’ investigation and ordered British Gas to cease all warranty activities until they can demonstrate compliance with its standards and requirements. .

“Our compliance reviews were launched to assess and raise standards across the industry,” he said.

“Companies are legally required to submit an honest representation of the facts and we have required assessments to be signed off by their boards.

“It is a very serious matter for any licensee to deliberately provide misleading or inaccurate information as part of these reviews.

“What is clear, as outlined by the Secretary of State, is that the picture presented by companies may not accurately reflect the experience of customers on the ground.

“Further reviews will therefore cross-examine what we have reported to us with direct reports from customers and wider stakeholders, and perhaps those involved in service delivery.”

Earlier this week, Ofgem ordered all domestic energy companies to suspend the compulsory installation of prepayment meters.

Companies can move customers who are in arrears on their energy bills to the most expensive pre-paid meters, but the rules are designed to ensure that vulnerable customers are not forcibly moved.

For Labour, shadow business secretary Ed Miliband accused Mr Shapps of repeatedly failing to act on the issue of pre-paid meters.

“Grant Shapps is the no-nonsense Business Secretary, who sat on his hands in the face of the scandal surrounding the mandatory installation of prepaid meters, while at the same time fighting energy companies making more and more profits at the expense of the British people,” he said. .

“Now, even after the scandal at British Gas and the disconnection of millions by the back door, he will still not accept Labour’s call for a total and permanent ban on the forced installation of prepayment meters until there is wholesale reform of a discredited mechanism , rotten. and callous system.

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