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

Reports, plans and updates
Publication date
Company
British Gas Trading Limited
Industry sector
Supply and Retail Market

Terms of Reference

Background

Protecting and empowering vulnerable consumers is a priority for Ofgem. Following information received by Ofgem, it appears to the Authority that BG is contravening or is 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.[1] As a result, Ofgem opened an investigation into British Gas Trading Ltd (“British Gas”) on 2 February 2023. The opening of this investigation does not imply that we have made any findings about non-compliance by British Gas.

Scope of the investigation

Currently the investigation is considering British Gas’ compliance with Standard Licence Conditions (“SLCs”) 0, 13.1 (a) and (d), 27, 28 and 28B.1 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, supply disconnections, prepayment meters and the installation of PPMs under a Relevant Warrant.

We may extend the scope of the investigation if we identify other areas of concern relevant to the ‘debt pathway’ during our assessment of the evidence.

The investigation will include 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 aim 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 will consist 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.

External Audit of policies, processes and procedures and customer experience

In order to progress at speed, we will commission 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 will carry out an independent audit and provide a detailed report which Ofgem will use to feed into our investigation findings.

As part of the commissioned audit, the auditors will assess 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 will be gathering and analysing 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.

Timescales

We anticipate that we will receive the external audit report in June. This will then form part of our assessment of British gas’ compliance with the relevant SLCs, alongside any other evidence gathered, including our analysis of consumer complaints.

Should the assessment of all the evidence indicate that British Gas are not compliant with the Relevant SLCs, we will take the appropriate action. This can include requiring remedial action and imposing a penalty.

 

[1] The term Relevant Warrant is defined in SLC 28B.10 of the Gas and Electricity Supply Licences.