Ofgem takes compliance action over British Gas’s handling of changes to how prepayment meter customers top up
Decision
Ofgem has an open compliance case into British Gas’s handling of changes to how prepayment meter (PPM) customers top up energy, looking at concerns that the supplier’s handling of these changes led to customer confusion and harm.
We have been concerned by reports of poor customer experience as a result of changes made by British Gas in recent months. These changes were (1) to switch customer’s meter top-up provider from PayPoint to PayZone (fully ceasing PayPoint on 31 December 2019), and (2) to increase the minimum PPM top up value from £1 to £5 from 1 January 2020.
In February 2020 British Gas announced that it will return to a £1 minimum top up value while it continues to review the needs of its prepayment customers – we welcome this move.
When a supplier undertakes significant operational changes that could impact its customers it is vital that it takes appropriate steps to manage risks, including informing customers of the changes and providing appropriate support throughout. This is especially important where vulnerable customers are involved.
We have held British Gas to account and asked them to explain their decisions and analysis of the impact these actions would have on customers. We will assess whether it took appropriate steps to identify and manage key risks.
In early December we became aware of British Gas’s decision to increase the minimum top up amount from £1 to £5. British Gas later confirmed that this was the case. We stressed the importance of ensuring customers were not caught off guard by the change, and that the supplier appropriately managed risks associated with the increased minimum top-up value.
Despite closely engaging the supplier before their two operational changes went live, we quickly became aware of a variety of issues which arose and have been concerned that these issues may have led to poor customer outcomes. In early January we opened a compliance case into British Gas’s handling of these changes.
Ofgem has strong rules in place requiring suppliers to treat customers fairly and to have particular regard to vulnerable customers. This includes how suppliers communicate with customers. Ofgem also has clear guidance on the steps a supplier must take to ensure it is safe and practicable in all circumstances for a customer to use a PPM. We will continue to closely monitor the experiences of PPM customers and engage with suppliers where we have concerns with their approach.
The opening of this compliance case does not imply that Ofgem has made any findings about non-compliance by British Gas. Ofgem will report in due course on the findings of its compliance engagement. As with any compliance case, the outcome could range from a decision that there is no need for any further action through to the opening of an enforcement investigation, if appropriate.
Additional notes:
- Ofgem’s understanding of the needs of PPM customers is informed by considerable work we have undertaken over the last few years as part of our Consumer Vulnerability Strategy. We closely monitor the experience of these customers, and have undertaken a policy consultation into prepayment self-disconnection and self-rationing. We expect to publish our final proposals on these areas in March 2020.
- A range of PPM top-up providers are available and consumers can benefit from competition in this market. It is important that suppliers consider the needs of their customers when managing any transition to a new top-up provider.