Last week, news of British Gas’ forcible installation of prepayment meters shocked the country. Following the publication of the story by The Times, the energy giant, part of Centrica plc, moved quickly to stem the outrage.
CEO, Chris O’Shea, appeared on several national television and radio shows and supplied a statement that read:
“Protecting vulnerable customers is an absolute priority and we have clear processes and policies in place to manage customer debt carefully and safely. The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.
“Having recently reviewed our internal processes to support our prepayment customers as well as creating a new £10 million 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.
“More broadly, there are clearly significant challenges around affordability and unfortunately, we don’t see that changing anytime soon. We need to strike a balance between managing spiralling bad debt and being aware that there are those who refuse to pay and those who cannot pay. We think Government, industry and the regulator need to come together to agree a long-term plan to address this and ultimately create an energy market that is sustainable.”
While acknowledging his accountability, albeit briefly and without a shred of sincerity, the PR strategy appears to focus on deflecting blame. Unfortunately for British Gas, and as my granny would have said; it won’t wash.
While Arvato Financial Solutions had been hired to do the dirty work, the ultimate responsibility lies with British Gas, and, as Chief Executive Officer, with Mr O’Shea. No spin can shield O’Shea from his failure. If he knew about the practice, he put profit before people and is now paying the price. If he wasn’t aware, then he absolutely should have been. Its actions violated its own code, which clearly sets out the business’ commitment to doing the right thing. Its conduct falls far short of any definition of responsible business.
Denying all knowledge and throwing Arvato under the bus is not an acceptable response. O’Shea’s disingenuous statement then goes on to remind us of its miserly £10m fund to support prepayment customers, before finally referring to the cost of living crisis in a weak attempt to create the illusion of a shared issue. This is not a shared industry problem and efforts to spin the narrative to position it as such is an insult to those affected by its actions.
It’s worth remembering that, even before this latest PR crisis, British Gas was a brand with a reputation problem. Its BrandIndex score, compiled by YouGov, fell 16 points between 1 January 2022 and 1 August 2022. Its score of 17.9 plummeted to 1.9. Its reputation with the public as a whole fared badly, too, dropping from 0.0 to -9.3.
British Gas is a damaged brand that will need an honest, sincere approach to this latest crisis if its reputation is to be rehabilitated. What it doesn’t need are cynical attempts to deflect blame for its failure to protect vulnerable customers.
Graham Stuart has echoed the sentiment, calling for urgent redress for “mistreated customers”, while Ofgem demanded “action, not warm words.”
Energy and Climate minister, Graham Stuart, said, “I have asked O’Shea to report back to me urgently outlining the role he will take personally to fix these very serious cultural issues. I told him I want to see these vulnerable, mistreated customers identified and redress provided. I will be monitoring matters extremely closely to make sure justice prevails.”
Centrica, British Gas and O’Shea face a challenging period ahead as the work begins to steady the ship.
It will need to right its wrongs and reassure its customers. O’Shea must demonstrate that lessons truly have been learned. Rebuilding trust must be the priority – the question is whether that can be done with the brand so badly damaged, and with O’Shea still at the helm.
It will also need to call upon its advocates; those customers who are satisfied with the brand and the service it provides.
Shares in Centrica fell by more than 3% on Thursday; one of the FTSE 100’s biggest fallers, demonstrating the financial risk to the business should the scandal deepen.
We could also see more scrutiny on O’Shea; several articles have popped up over the weekend focusing on his background, his personal life and values, and his role at the energy giant. The negative publicity around the company’s controversial “fire and rehire” policy does not reflect well.
Despite attempts to shift the blame, the buck stops with O’Shea and someone must pay the price for the scandal.
As we head into another week, those whose homes were broken into by British Gas’ thugs will almost certainly begin to tell their stories – and with new platforms like TikTok in the mix, it is very difficult to control the narrative.
There’s one thing we can be certain of – with investigations yet to take place, and calls for British Gas to provide redress, this isn’t going away anytime soon.