Ofgem’s moratorium on forced pre-payment meter (PPM) installations will not end later this month and suppliers face the threat of further fines if they do not get their house in order, the regulator’s chief executive has warned.
In an unprecedented joint hearing of Parliament’s justice and BEIS (business, energy and industrial strategy) committees today (14 March), Jonathan Brearley outlined the latest steps in Ofgem’s crackdown on forced PPM installations.
Following reports in The Times that British Gas had been breaking into customers homes to forcibly install PPMs, the regulator called on suppliers to pause the practice until the end of March while it also undertook a wider Market Compliance Review.
Brearley told the committees that he remained “deeply concerned” about forced installations.
He said: “Our priority is making sure that this industry gets its act in order, therefore they (suppliers) will not be restarting forced installations of pre-payment meters at end of March and only when and if, they are able to establish they are acting in accordance with that new code of practice.
“Our message to industry is you need to fix this now, not wait for this review.”
He also warned suppliers that they face heavy fines if they do not improve performance in areas such as identifying vulnerable households who should not have PPMs forcibly installed.
Noting that network companies had received a collective £10 million in fines due to failures in their treatment of vulnerable customers during 2021’s Storm Arwen, Brearley said: “If we find through this compliance review that suppliers don’t up their game fines will be levied here.
“It should not take the regulator to check every single detail of every supplier all the time: suppliers should be doing this automatically. If they do not, we are going to have to send a very strong signal and there is only one way to do that, which is to issue fines.”
He said Ofgem’s compliance review should “drive up standards” and is currently focusing on three areas: how to install PPMs in a safe and practicable way, who should have them fitted and post-installation aftercare for households.
He also told the committee that even with enhanced regulation of forced PPM installations, the regulator would not be able to completely stamp out poor practices.
“Even if the compliance work is perfect, we are not going to be catch everything that happens within companies: there will always be behaviours outside our ability, which is why need to be reactive as well as pro-active.”
The two committees also heard from former magistrate Robin Cantrill-Fenwick, who resigned from the bench earlier this year in protest at the bulk processing by lower courts of forced PPM installations.
Changes to the rules for how magistrates handled PPM warrants meant that Justices of the Peace had no grounds on which to question warrants issued by suppliers and much less judicial discretion, he said: “As magistrates we were required to take on an almost entirely performative and uncritical role approving warrant applications in bulk.
“It was reflective of a very strong presumption that magistrates were simply expected to perform a role really no more sophisticated than an algorithm.”
Cantrill-Fenwick said the new approach to forced installation did not reflect any change in the law, which is rooted in a 1954 statute, but had been driven by a desire to improve procedural efficiencies for both the courts and energy companies. :
Noting that the interests of occupiers had “got lost” in this drive, he said: “Ultimately that expectation has been shown to be quite naïve.”
Les Johnston, CEO of a debt collection company Richburns, defended the way that customers in bill arrears are dealt with by suppliers and their agents.
He said that prior to a home visit by a company like his own, which is used by many of the big suppliers, the customer will have received 20 to 40 pieces of communication from their energy provider.
Of the companies visited by Richburns, he estimated that around a quarter are identified as vulnerable meaning they do not have to have a PPM installed.