Business Secretary calls on energy suppliers to put remedial actions in place

Business and Energy Secretary Grant Shapps has given energy bosses a deadline of Tuesday (7th February) to report back to him on what remedial action – such as providing compensation – they plan to take should they have wrongfully installed prepayment meters in the homes of vulnerable customers.

The Business Secretary has today told Ofgem to toughen up on energy suppliers and investigate the customers’ experience of how their supplier is performing.

Shapps has called on the regulator to set up a new customer reporting system for households to pass on their own stories of how they are being treated – especially those who are vulnerable – and not just rely on energy firm bosses to share information with their regulator.

Business and Energy Secretary Grant Shapps said “ I am appalled that vulnerable customers struggling with their energy bills have had their homes invaded and prepayment meters installed when there is a clear duty on suppliers to provide them with support. They need to refocus their efforts on their consumers, the British public, who are at the receiving end of this abhorrent behaviour.”

“ I’m also concerned the regulator is too easily having the wool pulled over their eyes by taking at face value what energy companies are telling them. They need to also listen to customers to make sure this treatment of vulnerable consumers doesn’t happen again.”

News reports across the country have highlighted examples of the forced installation of prepayment meters in the homes of those who are struggling to pay their bills.

The regulator has also been asked to toughen up their reviews, going beyond the company headquarters to find out what is really happening in people’s homes by hearing from them directly and engaging more with charities and other groups that represent consumers. Currently, energy suppliers are required to provide Ofgem with information to demonstrate how they comply with the rules on supporting vulnerable consumers, on customers struggling to pay and on the fitting of prepayment meters.

The Business Secretary wants to see the voices of consumers and those who champion their needs heard when deciding which energy companies are meeting expectations  – with a customer reporting hotline being just one example we would want the regulator to consider.

On Thursday night a number of suppliers announced they would suspend forced installations after being pushed by Ofgem to pause the practice while they reassure the regulator they’re complying with the rules.

However, just over a week ago the Business Secretary launched a crackdown on the mistreatment of energy users by suppliers, already asking them to voluntarily commit to stopping this practice. He also demanded they share the number of warrants they’ve applied for in recent months and plans to publish the findings.

Earlier this week the Energy and Climate Minister also met British Gas CEO Chris O’Shea and expressed his horror at recent reports. He made it clear this kind of behaviour is unacceptable, especially from such a key and longstanding British company.

He urged Mr O’Shea to take urgent steps to repair the damage done to British Gas’ reputation and urgently come back to him outlining the role he will personally take to fix these cultural issues.

The British Gas boss was also told by the Minister that vulnerable, mistreated customers need to be identified and redress provided. He will be monitoring matters extremely closely to make sure this happens.

An Ofgem Spokesperson said “We share the Secretary of State’s shock at the behaviour that The Times investigation has uncovered at British Gas and, as a result, we have launched an immediate investigation and have issued a legal order for British Gas to cease all warrant activities until they can demonstrate compliance with our standards and requirements.”

“Our compliance reviews were launched to assess and drive-up standards across the industry. Companies are legally required to submit an honest representation of the facts and we required assessments to be signed off by their Boards. It is an extremely serious matter for any licensee to provide misleading or purposefully inaccurate information as part of these reviews.”

“What is clear, as the Secretary of State has laid out, is that the picture presented by companies may not accurately reflect what is experienced by customers on the ground. Therefore, further reviews will cross examine what we have had reported to us with direct reports from customers and wider stakeholders, and potentially those involved in delivery of services. This will include finding new ways for customers to highlight their concerns to Ofgem.”

“As already announced, as well as our investigation specifically into British Gas, our next Market Compliance Review of all suppliers will focus on Pre-Payment Meters (PPMs), the issue of forced PPM installation, and remote switching to PPM through Smart Meters, effectively capturing and acting on the real experiences of customers. We will not hesitate to take firm action where failings are found.”

“Our reviews have already exposed that there needs to be significant improvement in standards across the sector and I will be discussing with CEOs of retailers and consumer groups how we can drive the improvements that customers need and expect at pace.”