O’Shea expresses ‘horror’ at PPM revelations

Chris O’Shea has expressed his “horror” following major revelations that prepayment meters (PPMs) were forcefully installed at the homes of vulnerable British Gas customers and stressed that ultimately “I am accountable for this”.

The Centrica chief was speaking to the BBC on Thursday (2 February) following the explosive findings of an undercover investigation by The Times into Arvato Financial Solutions, the company Centrica uses to pursue debts.

It is reported that British Gas customers who have had PPMs forcefully installed in recent weeks “include a woman in her fifties described as ‘severe mental health bipolar’, a woman who ‘suffers with mobility problems and is partially sighted’ and a mother whose ‘daughter is disabled and has a hoist and [an] electric wheelchair’”.

The findings of the investigation have been widely condemned, with business secretary Grant Shapps saying he is “horrified” and that the practices were “abhorrent”, while Ofgem has launched an investigation into the matter.

Speaking on Radio 4’s Today programme this morning, O’Shea was grilled on the issue.

He was asked about an incident which reportedly saw five men working on behalf of British Gas break into a house where three children live with their father. As a locksmith starts working on forcing entry to the house so the team can fit a PPM, their team leader is reported as saying “this is the exciting bit. I love this bit”.

“There is nothing that I can say that can express the horror I had when I heard this, when I saw this. It is completely unacceptable, that language is unacceptable,” said O’Shea in response.

He added: “The contractor that we have employed , Arvato, has let us down but I am accountable for this. This happened, as you say, when people were acting on behalf of British Gas.

“There is nothing that can be said to excuse it. Every one of our customers deserves to be treated with respect, that’s what I would expect of myself, that’s what I expect of my colleagues, that’s what I expect of our contractors.”

Centrica has since suspended all forced PPM installs “at least until the end of the winter” and has commissioned an independent report into the matter.

Further concerns raised include the fact debt collectors working for Arvato are incentivised with bonuses when they force-fit PPMs, with fears this can encourage them to ignore vulnerabilities.

The paper reports an agent claiming that single mothers were their most common customers and that they said: “If every single mum that starts getting a bit teary you’re going to walk away from, you won’t be earning any bonus.”

A spokesperson for Arvato said the company “acts compliantly at all times in accordance with the regulatory requirements” in the areas it is operationally active.

They added: “We treat customers with whom we come into contact with respect and assess their individual needs at the time of our visit. If there has been any verbal or any other type of misconduct by individual employees, we deeply regret it.

“If any inappropriate statements were made, none of these statements represent the company’s views or official guidance on how to interact with consumers.

“Our bonus structure is solely focused on obtaining the most appropriate outcome for each individual customer, we do not prioritise or reward one outcome over another.”

Business and energy secretary Grant Shapps said: “I am horrified by the findings of this investigation and would like to thank The Times for shining a light on these abhorrent practices.

“Switching customers – and particularly those who are vulnerable – to prepayment meters should only ever be a last resort and every other possible alternative should be exhausted. These findings suggest British Gas are doing anything but this.

“I have asked the energy minister to hold a meeting with the company in the coming days, and he will be demanding answers to ensure this systemic failure is addressed.”

Meanwhile Ofgem has launched its own “urgent” investigation into what it labelled “extremely serious allegations”.

A spokesperson added: “It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.

“We recently announced a major market-wide review investigating the rapid growth in prepayment meter installations and potential breaches of licences driving it.

“We are clear that suppliers must work hard to look after their customers at this time, especially those who are vulnerable, and the energy crisis must not be an excuse for unacceptable behaviour towards any customer – particularly those in vulnerable circumstances.”

Tackling energy debt 

O’Shea raised further concerns about how the industry can handle customers who are unable to pay their bills, adding that it is not responsible for suppliers to do nothing.

He said: “Of those customers on PPMs we have in the past year around 20,000 customers have had meters installed under warrant. Now that’s around about the same rate as we find across the industry.

“The challenge we have got is that if somebody falls into arears, it’s not responsible for us to not do anything. So what we try and do is we try and get in contact with our customers, we try to help them.”

He highlighted the £50 million voluntary support package Centrica has created in the past year to enable British Gas to help customers who cannot pay, although did not respond directly to a question on whether more of the company’s profits could be directed into this fund.

He added: “We only ever apply for a warrant to install a PPM where a customer refuses to engage. It usually takes between 5-6 months for us to go through this process, it’s not what I would like to do.

“The only other option is customers that don’t pay you, and don’t engage, you allow them to run up unsustainable debts. Now no other business would do that, if you fall behind with your rent or with your mortgage, you have to talk to people.”

Responding to O’Shea’s comments shadow climate and net zero secretary Ed Milliband said it was a “very small minority” of customers who refused to pay.

He said: “We are talking about hundreds of thousands of people last year who had PPMs forced on them according to Citizens Advice.

“There may be a very small minority of recalcitrant people but the vast majority, this is people who can’t afford to pay and what needs to happen is there needs to be a proper system for helping those people, a proper system of hardship help…people on prepayment meters pay more for their energy than anyone else and so the first thing government should be doing is getting rid, as we have shown how you can do, of the prepayment penalty – the fact that people are paying more for their energy if they are vulnerable and in poverty.”