In January 2023, we said that we would open a Market Compliance Review into prepayment meter practices.
All domestic suppliers have paused applying for warrants for forced installation of prepayment meters until 31 March 2023 while we undertake a wider review into prepayment meters. We recognise that any changes would have an impact for both consumers and energy suppliers, and we welcome views from across the sector, consumer groups and charities, and individual consumers as part of this work.
Since announcing that we would be launching a review into prepayment meters, the issue of forced installations has been highlighted and we opened an investigation into British Gas. This is separate to this wider Market Compliance Review.
Where our previous Market Compliance Reviews have used supplier data, Ofgem monitoring data and third-party performance statistics for our investigations, including into customers in payment difficulty and consumer vulnerability, as part of our Market Compliance Review on Prepayment Meter practices we will be looking in much greater detail at customer experiences, using a wider span of evidence sources including specific customer journey data sampling.
This publication provides an update on the scope and structure of this MCR and the likely timelines, which may change.
External socialisation of MCR scope and structure with suppliers and consumer groups
Suppliers to respond to part one of MCR request for information
w/c 13 March 2023
Subject to level of sample testing across suppliers: suppliers to provide full and final response to MCR request for information
end of March 2023
Subject to level of sample testing across suppliers: first on-site sample testing no earlier than
w/c 17 April 2023
Scope and structure of the MCR
We are building on our approach from previous Market Compliance Reviews, and will test suppliers’ management control frameworks across a number of areas to ensure they are complying with our rules and we’ll test consumer outcomes:
- Governance – how boards and management are providing direction and oversight, leading to decision making with respect to remote switching to pre-payment meter and installation of pre-payment meters under warrant.
- Policies - what policies suppliers have for remotely switching a smart credit meter to a Prepayment mode (remote mode switching) and fitting a prepayment meter under warrant.
- Risk Management - what is the process of identifying vulnerability, assessing, and controlling threats to customer experience and their business operation, and then having the mechanism to report them.
- Processes – what steps are taken for embedding and implementing policies, standards and procedures and operating activities of the firm.
- Controls – how suppliers are ensuring that policies, procedures and processes are operating effectively using a variety of mechanisms, and embedded throughout the business process and overseen or operated by people with specific responsibilities
- Management information – how management is monitoring and managing risks and key indicators relating to remote mode switching and warrant installations and how they anticipate future issues and prompt further analysis, decisions or actions.
- Training programmes – how suppliers are using compulsory training and learning and advancement training pertinent to the remote mode switching and prepayment meter installations under warrant to ensure staff and third parties understand the rules, obligations, policies, and processes to deliver good consumer outcomes
- Assurance – how suppliers gain assurance that rules are being adhered to though audits and checks (both internally and independently) over remote mode switching and prepayment meter installations under warrant.
In addition to assessing the above and compliance with our rules, we will utilise real customer experiences in our assessment:
- We have already collected intelligence from consumer groups and charities on specific cases where non compliance with licence conditions may have occurred.
- We have asked Citizens Advice to provide full data on all cases where mistreatment of customers may have occurred
- We have also asked the Energy Ombudsman to provide full data on all cases where complaints related to remote switching or installation of pre-payment meter under warrant has occurred
We will review consumer outcomes and sample test consumer cases for each supplier that undertakes these activities. Informed by our intelligence we will also target the suppliers of highest risk, and scale the level sample testing accordingly.
- Our sampling will focus in on high risk cases through intelligent case identification focussing on those cases where complaints were made to consumer groups and charities, the Energy Ombudsman or directly to us.
- We will also select samples directly from suppliers and test to confirm if suppliers’ treatment of actual customers who experienced remote switching to pre-payment meters or installation of a pre-payment meter under warrant were treated in accordance the rules at all stages of the consumer journey.