British Gas halts use of warrants to force people on to prepayment meters

British Gas has suspended the use of court warrants to force the installation of prepayment meters after evidence that agents working on its behalf ignored customers’ vulnerabilities.

MPs and consumer groups had raised concerns that elderly and disabled people were being forced on to prepayment meters and then routinely cut off from heat and power as they could not afford to top up.

Wednesday’s decision came after an investigation by the Times alleged that Arvato Financial Solutions, a company used by British Gas to pursue debts, had broken into homes to fit meters when there were signs that young children and people with disabilities lived in the property. AFS employees are incentivised with bonuses to fit prepayment meters.

British Gas customers who have had their meters fitted by force recently included a woman in her 50s described in job notes as “severe mental health bipolar” and a mother whose “daughter is disabled and has a hoist and [an] electric wheelchair”, the Times reported.

Related: Labour calls for halt to ‘shameful’ forced installation of prepayment meters

The business secretary, Grant Shapps, said he was “horrified by the findings” of the investigation and has ordered an urgent meeting with British Gas. He said ministers would be “demanding answers to ensure this systemic failure is addressed”.

Chris O’Shea, the chief executive of the owner of British Gas, Centrica, said: “Protecting vulnerable customers is an absolute priority and we have clear processes and policies to ensure we manage customer debt carefully and safely. The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.”

The Guardian revealed last month that British Gas had stopped switching people on to prepayment meters remotely through smart meters. O’Shea said: “Having recently reviewed our internal processes to support our prepayment customers as well as creating a new £10m fund to support those prepayment customers who need help the most, I am extremely disappointed that this has occurred.

“As a result, on Wednesday morning, we took a further decision to suspend all our prepayment warrant activity at least until the end of the winter.”

Arvato Financial Solutions told the Times it acted “compliantly at all times in accordance with the regulatory requirements”.

The energy regulator Ofgem is conducting a review into suppliers’ use of prepayment meters. On Tuesday, its chief executive, Jonathan Brearley, said Ofgem was examining how to close the gap between the cost of energy bills for customers on prepayment meters and those on direct debits but defended suppliers that had forced people on to the meters.

Ofgem has also announced it will launch an investigation. A spokesperson said: “These are extremely serious allegations from the Times which we will investigate urgently with British Gas and we won’t hesitate to take firm enforcement action.

“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.”