Ofgem approach to investigation into British Gas Trading Ltd’s compliance with Standard Licence Conditions (SLC) – SLC 0, 13.1 (a) and (d), 27, 28 and 28B.1 of the Gas and Electricity Supply Licences announced on 2nd February 2023

Terms of Reference

Background

Protecting and empowering vulnerable consumers is a priority for Ofgem. Following information received by Ofgem, it appeared to the Authority that BG was contravening or was likely to contravene its Licence Conditions relating to the Standards of Conduct, arrangements for access to customer premises, disconnections, prepayment meters and the installation of prepayment meters (“PPM”) under a Relevant Warrant (as defined in Standard Conditions of the Gas and Electricity Supply Licences). As a result, Ofgem opened an investigation into British Gas Trading Ltd (“British Gas”) on 2 February 2023. The opening of this investigation did not imply that we had made any findings about non-compliance by British Gas.

Scope of the investigation

The investigation considered British Gas’ compliance with Standard Licence Conditions (“SLCs”) 0, 13.1 (a) and (d), 23, 26, 27, 27A, 28, 28B.1 and 32 of the Gas and Electricity Supply Licences (collectively, the “Relevant SLCs”). The Relevant SLCs relate to suppliers’ obligations regarding the Standards of Conduct, arrangements for access to customer premises, notification of domestic supply contract terms, Priority Services Register, supply disconnections, prepayment meters, reporting on performance, and the installation of PPMs under a Relevant Warrant.

The investigation included a thorough examination of British Gas’ compliance with the Relevant SLCs, including the impact of its behaviour on customers who fall into debt and enter the ‘debt pathway’. In particular, we aimed to ensure that:

• British Gas has taken all steps required under its licence to support customers in domestic households who fall into debt before taking any action to install a PPM or disconnect that customer (including providing advice on how to reduce costs, signposting to sources of debt assistance and offering alternative repayment options);
• before taking any steps to install a PPM under warrant or by remote switching, British Gas and its representatives systematically assess whether it is safe and reasonably practicable to install a PPM and whether a customer’s mental capacity and/or psychological state is such that installation of a PPM would be severely traumatic to a customer;
• British Gas has taken all reasonable steps to ensure that each representative who visits a customer’s premises on the licensee’s behalf has the necessary skills – including the ability to make an assessment on the safety and practicability of installing a PPM and on assessing the mental capacity and psychological state on the doorstep – and is fit and proper to visit and enter customer premises; and
• customers who are subject to the forced installation of PPMs (whether under warrant or by remote switch) are treated fairly in accordance with our Standards of Conduct and that any BG representative behaves and carries out any actions in a fair, honest, transparent, appropriate and professional manner.

Methodology

The investigation consisted of three main elements:

1. An end-to-end review of British Gas’ policies, processes and procedures to ensure they are compliant with the Relevant SLCs;
2. A review of a statistically significant sample of customer journeys to assess whether British Gas and its representatives have applied their policies, processes and procedures in assessing cases and making decisions on the treatment of customers who enter the ‘debt pathway’; and
3. Working with consumer advice agencies and the Ombudsman for Energy to gather and review evidence of consumers’ experiences, to better understand whether they were treated fairly, and the impact on them of their experience.
4. External Audit of policies, processes and procedures and customer experience

In order to progress at speed, we commissioned an external auditor to work with us in carrying out the review of British Gas’ policies, processes and procedures, and the review of customer journeys. The external auditor carried out an independent audit and provide a detailed report which Ofgem used to feed into its investigation findings.

As part of the commissioned audit, the auditors assessed a statistically robust sample of British Gas customer interactions.

Consumer Engagement

Given the level of potential harm to vulnerable consumers which can arise from suppliers’ non-compliance with the Relevant SLCs, we gathered and analysed complaints from consumers about their experiences in respect of British Gas’ installation of PPMs from various sources, including consumer advice agencies and the Ombudsman for Energy.

Case outcome

Read about the outcome of this investigation on the British Gas - PPM Installation Investigation page.