Ofgem has announced a “comprehensive, independent and wide-ranging review” into British Gas after its subcontractors were revealed to be breaking into homes to fit prepayment meters.

The investigation into British Gas will examine whether the firm had taken all steps required under its licence to help domestic customers with debt before installing a prepayment meter or disconnecting them.

It will also look at whether British Gas and anyone working for the supplier assessed if a customer’s “mental capacity and/or psychological state is such that installation of a prepayment meter would be severely traumatic to a customer and make their condition significantly worse”.

Further, it will investigate if those working on fitting meters for British Gas had the necessary skills – including the ability to assess the mental capacity and psychological state of the customer on the doorstep – and was “fit and proper” to enter customers’ homes.

The regulator’s chief executive Jonathan Brearley told BBC Radio 4’s Today programme: “Clearly something has gone wrong in British Gas and what we’re announcing today is a comprehensive, independent, wide ranging review into what has happened there.”

To be clear, if we find those rules haven’t been followed those companies will be forced to make redress and that’s highly likely to mean they will have to put that meter right, they will have to pay compensation and if it’s systematic there will be fines for those companies

He said a separate investigation launched in January will assess whether rules have been followed.

He said: “To be clear, if we find those rules haven’t been followed those companies will be forced to make redress and that’s highly likely to mean they will have to put that meter right, they will have to pay compensation and if it’s systematic there will be fines for those companies.”

Ofgem’s investigations follow the issue being thrust into the spotlight after an investigation by The Times newspaper revealed that British Gas subcontractors were breaking into the homes of customers – including disabled and mentally ill people – to install the meters.

All suppliers have subsequently committed to stop force-fitting prepayment meters in any homes, not just those of vulnerable customers, until the end of March.

A British Gas spokesman said: “The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.

“We are conducting our own in-depth investigation to understand exactly what’s happened and where we find things have gone wrong, we will put them right. We will also be fully co-operating with Ofgem on their investigation.

“We only install pre-payment meters under warrant as a last resort after all other options have been exhausted. This takes many months where there are multiple efforts to engage with a customer and the majority of the time, we can find a solution such as access to our support funds or payment plans – we’ve helped over 650,000 customers with their energy bills in the past year.”
On Tuesday, Ofgem set out its next steps in both the British Gas and wider prepayment meter review “to support and protect energy customers when suppliers fit prepayment meters by force or via remote switch”.

Mr Brearley also called on all suppliers to use the pause in installations to review all of their recent forced and remotely switched prepayment installations, and consider if any need to be reversed, and compensation offered where the strict rules have not been followed.

I am concerned about the way customers in already distressing situations are being treated when suppliers force them onto PPMs

Mr Brearley said: “As a result of the unprecedented surge in energy prices, households across the country are facing significant energy bills and this has meant many are finding themselves in debt and being forced onto prepayment meters (PPMs).

“I am concerned about the way customers in already distressing situations are being treated when suppliers force them onto PPMs.

“That’s why, today, we have set out further details on the two investigations, one into British Gas for potential breaches that have been alleged indicating that something went very badly wrong at British Gas and the other into PPMs across all suppliers to assess whether this is an isolated case.

“The rules and regulations are clear that installing forced PPMs should only be done as a last resort and only where it is safe and practicable to do so.

“We expect suppliers to treat customers with compassion and professionalism and those executing a warrant should take into account what they find when they visit a home and pause the installation if they see a safety risk. Where this hasn’t happened, we will hold suppliers to account.

“However, I’m telling suppliers not to wait for the outcome of our reviews and to act now to check that PPMs have been installed appropriately, and if rules have been broken, offer customers a reversal of installations and compensation payments where appropriate. There will also be fines issued from Ofgem if the issue is found to be systemic.

“We are taking this issue extremely seriously and customers should feel reassured that where the rules have been broken, Ofgem will act.”

Suppliers are allowed to apply to courts for a warrant to enter the home of a customer who has not been paying their bills and has not engaged with their supplier.