Energy companies have been asked to suspend the forced installation of prepayment meters by the energy regulator Ofgem.
This comes after The Times found debt agents for British Gas broke into vulnerable people’s homes to fit meters.
Ofgem has asked all suppliers to review the use of court warrants to enter the homes of customers in arrears.
It said firms must get their “house in order”.
Jonathan Brearley, the regulator’s boss, said he had ordered the review into pre-payment meters to “uncover poor practice” and that he would not hesitate to take the “strongest action in our powers” where needed.
Prepayment meters require customers to pay for their energy in advance, either through accounts or by adding credit to a card.
They are more expensive than paying by direct debit but are sometimes the only option for people who have struggled to pay and are in debt to a supplier.
The undercover investigation by The Times revealed how agents working for Arvato Financial Solutions on behalf of British Gas had forced their way into the home of a single father-of-three to install a prepayment meter.
Chris O’Shea, the boss of Centrica which owns British Gas, earlier told the BBC he was horrified by this and the firm has said it will suspend forcefully installing prepayment meters until at least after the winter.
Mr O’Shea acknowledged he was “accountable” for the contractor’s actions while Arvato Financial Solutions has not commented.
EDF, Britain’s second largest supplier, has also confirmed on Thursday that it is suspending the forced installation of prepayment meters and reviewing its practices to see if it can make improvements.
Ovo Energy suspended its warrant activities in November and Octopus Energy said it was “not installing any at the moment” and rarely had done.
Ofgem said energy suppliers had been asked to examine their relationships with third-party contractors and to look at “incentives that could give rise to poor and unacceptable behaviours”.
Mr Brearley warned no energy chief executive could “shirk their legal and moral responsibilities to protect their own customers, especially the most vulnerable”.
In the case of British Gas, Mr Brearley said it was “astonishing for any supplier not to know about their own contractors’ behaviour, especially where they are interacting with the most vulnerable in our society”.
“We are opening a comprehensive investigation into British Gas on this issue and we will not hesitate to take the strongest action needed,” he added.
Graham Stuart, the minister for energy and climate, said British Gas should “hold their heads in shame”.
Though the company had announced it was supporting customers, “it turns out they were doing anything but”, he said.
Mr Stuart told the BBC he met all energy suppliers last week to talk about how to improve looking after vulnerable people, “because there are clear rules and they have obviously not been followed”.
He said the discovery of how some British Gas customers had been treated was “just appalling”.
“It’s disgraceful and it must stop. I am angry, everyone should be angry. It’s completely in the face of all the promises that I’ve been made by suppliers,” he added.
‘It felt violating’
Jane, who did not want us to use her surname, came home to her recently-bought house in Poole, Dorset in 2014 to find that someone had been in her home, installed a prepayment meter and left a letter in the kitchen.
Jane said the experience was “horrid” and happened just after she lost her unborn child at 17 weeks. She said she was mentally “broken”.
The now 46-year-old said she had been sent letters addressed to a previous occupant and had posted them marked ‘return to sender’. Jane added she was signed up to a direct debit plan with her energy provider, and had not missed a payment.
She called the firm and said it transpired that it was the previous tenant who had been in arrears. She said a neighbour with a spare key was persuaded to let the installers in.
Jane said her energy provider apologised on the phone for the mistake, removed the prepayment meter, and credited her account with £45.
“It feels violating to have someone come into your house like that. It was so scary,” she said. “You could sense someone had been in. The house was freezing cold.”
EDF said in 2022, the supplier had applied for 13,766 warrants in relation to domestic customer debt and in around half of the cases, the firm took the decision not to proceed “once the customer had engaged” and the firm “understood their circumstances”.
A spokesman for British Gas said it had about 1.5 million customers on prepayment meters and last year executed around 20,000 prepayment installs with a warrant. It is the country’s largest supplier with 7.26m customers.
Strict rules apply that prevent energy firms putting an at-risk customer on to a prepayment meter, but in certain circumstances customers in arrears can be moved either remotely on a smart meter, or physically after the firm has been given a warrant to do so.
Suppliers are required to have exhausted all other options before installing a prepayment meter, and should not do so for those in the most vulnerable situations.
Utilita said it had suspended installing physical prepayment meters under warrant. The company is a specialist prepayment energy supplier and has the majority of its 827,000 customers on smart meters.
Octopus Energy said it carried out 31 in its history under a warrant. It said it suspended all Bulb warrants shortly after it took over the firm.
So Energy, said it had not “force-fitted” any physical prepayment meters under warrant. It added it had never switched a smart meter remotely from credit to prepay without the customer’s knowledge or consent.
Dame Clare Moriarty, chief executive of Citizen Advice – which has been calling for a ban on forced prepayment installations – welcomed Ofgem’s announcement.
“The rotten core of debt collection practice in the energy sector has now been exposed for all to see. But this isn’t a case of one bad apple,” Ms Moriarty said.