Ofgem announced on Tuesday 21 February 2023 the next steps in its investigation into British Gas and its wider review of prepayment meter (PPM) practice, covering suppliers that fit meters by force or switch smart meters to prepayment mode remotely1. The regulator also called on all suppliers to use the pause in installations, which runs until 31 March 2023, to check recent forced and remotely switched installations and consider reversing them and offering compensation where the rules were not followed1.
The Ofgem investigation into British Gas will examine whether the company took all steps required under its licence to support domestic customers in debt before installing a PPM or disconnecting them, including advice on reducing costs, signposting to debt assistance and offering alternative repayment options1. It will also look at whether British Gas and its representatives systematically assess, before any installation under warrant or remote switch, whether a PPM is safe and reasonably practicable and whether a customer's mental capacity or psychological state means installation would be severely traumatic and make their condition significantly worse1. Further questions cover the skills and suitability of representatives who visit homes, and whether customers are treated fairly under Ofgem's Standards of Conduct1.
Ofgem issued a Provisional Order to British Gas at the start of February 2023 temporarily banning any forced installation or remote mode switch, following undercover reporting by The Times1. It has also agreed with all other suppliers a voluntary suspension of forced PPM installations and remote switching of smart meters to prepayment mode until 31 March 20231.
The market compliance review will examine governance, policies, risk management, processes, controls, management information, training programmes and assurance across suppliers1. It will include targeted engagement through consumer groups, the Energy Ombudsman and customer feedback1. Ofgem has separately launched work with stakeholders on what further protections may be needed in the rules, regulations and guidance around PPMs, and on measures that could reduce the need for installations or remote switches, to conclude by the end of March 20231.
"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."
Under current rules, suppliers can move customers onto a prepayment meter by force if they are behind on bills and all other options have been exhausted, but the practice is banned altogether for certain highly vulnerable customers, including those with medical equipment needing constant power, those with severe mental health problems, or those who would struggle to top up1. Ofgem has also written to the Secretary of State for Energy, Grant Shapps, setting out the above and the scope of the review1.
Why it matters for households
A forced PPM installation or a remote switch to prepayment mode changes how a home pays for energy: credit is bought in advance by topping up with a smart card, key or cash token, and supply can stop when the credit runs out1. For a household, that shifts the risk of running out of power onto the occupant rather than the supplier. Ofgem's stated position is that forced installation should happen only as a last resort and only where it is safe and practicable, and that it is banned outright for certain highly vulnerable customers1. The investigation and review therefore bear directly on when a supplier can take that step, and on what happens to homes where it may already have been taken incorrectly. Ofgem has said it will check suppliers' actions but that suppliers should not wait to act themselves1.
What happens next
The pause on forced installations and remote switches runs until 31 March 20231. The work with stakeholders on further protections is due to conclude by the end of March 20231. Ofgem has said fines will be issued if the issue is found to be systemic1. No outcome date for the British Gas investigation or the market compliance review has been reported1.