David Gale's letter to Rt Hon Ed Miliband MP, Secretary of State for Energy Security & Net Zero dated 12th July 2024. It includes a summary of #EnergyFraud issues, to include concealment of IT bugs and data integrity issues, criminal pursuit of payment of monies known not to be owed, and an investigatory framework:

Dear Secretary of State

URGENT: #EnergyFraud - “Marking Their Own Homework”

I am writing to schedule a briefing for you in your role as Secretary of State on the urgent matter of #EnergyFraud. The letter below provides an introduction to the issue, components of a solution, notes on the wider context, and a bullet pointed example case study.

As an experienced Chief Information Officer (CIO), I have briefed ministers and senior civil servants of fourteen national governments. As a forensic records investigator, I have had twenty years involvement in serious fraud investigations, to include providing information, counsels’ questions, and a formal witness statement to the Post Office Inquiry.

A five-year investigation has confirmed that energy companies and the regulator, Ofgem, have concealed catastrophic data losses and cross-contamination of customer account records since at least 2017, with a resultant volume of criminally fraudulent overbilling that was known to be inaccurate. The corrupted data has also been used to misrepresent the overall unpaid consumer debt owed to energy companies.

The Issue

To ‘maintain public confidence in the UK consumer energy industry’, Ofgem and your ministerial predecessor have concealed their knowledge of serious criminal activity by energy companies. Whilst concealing customer billing data integrity issues, energy companies have pursued vulnerable and disabled customers through the courts for payment of monies known not to be owed.

I can also confirm, via a recent Freedom of Information request served on the Office for Product Safety and Standards (OPSS), that Ofgem has concealed 1.86 million uncertified electricity meters as being currently relied upon for billing purposes.

Although energy consumers have not been sent to prison, there are instances of destitution and suicide, with the unlawful conduct of energy companies impacting some of the most vulnerable members of society. Despite the judgment in Ferguson v British Gas Trading Ltd, those energy consumers who are able are being left to initiate private civil proceedings against their energy suppliers. Companies known to be involved include E.On (since at least 2017), OVO, and British Gas. The accounts of thousands of victims are available on the related companies’ unofficial complaints Facebook pages. The scale of the concealed IT-driven billing fraud is akin to the Post Office scandal on steroids.

A summary of the campaign / five-year investigation can be found at: http://change.org/energyfraud There is evidence of heavy social media filtering of up to 95% on campaign related posts. It has already been made clear that the mainstream print media has a significant financial dependency on energy industry advertising revenue. Notwithstanding that apparent censorship, thousands of victims of #EnergyFraud and harassment have signed up to the petition for a criminal investigation of energy companies.

The ‘Compensation for involuntary installation of prepayment meters, 1 January 2022 to 31 January 2023’ scheme, announced by Ofgem, ignored the regulator’s knowledge of: involuntary installations that predate 01.01.2022, evidence of contemptuous / perjurious court applications for entry warrants that Ofgem and energy companies knew were in breach of the Electricity / Gas Act(s), serial disability discrimination, harassment, and evidence of serious harm caused to vulnerable / disabled energy consumers.

The modus operandi of both internal and external energy company (and Ofgem) lawyers has mirrored the conduct of Post Office lawyers in virtually every respect. One wonders if the Secretary of State has even been informed by Ofgem of the likelihood of litigation action being initiated against Ofgem itself.

The Solution

I have formulated a series of focused instructions to ensure legally compliant governance over energy industry audits:

1. A suitably qualified party to be instructed to carry out an analysis of the relevant logs within energy company billing systems to identify how, when, and why the integrity of the datasets within customer billing records has been compromised.

2. A suitably qualified party to be instructed to carry out a full review of the use of dataset restoration throughout the lifetime of the billing systems, insofar as possible, to independently confirm the integrity of related records and to specifically identify instances of cross-contamination.

3. A suitably qualified party to be instructed to carry out a full review of the controls over and use of the capability of authorised personnel to create, amend or delete records within the dataset throughout the lifetime of the billing systems.

4.  A suitably qualified party to be instructed to carry out an assessment of how many energy consumers have been financially impacted by issues identified via 1-3 above.

5. That the Department for Energy Security and Net Zero instructs Ofgem to ensure that energy consumers suffering loss as a result of unlawfully concealed data corruption resulting in fraudulent billing are properly compensated in a timely fashion.

6. That the Department for Energy Security and Net Zero instructs Ofgem to ensure that energy companies provide up to date corporate risk registers within annual audits.

Wider Context

I am already working with the Financial Reporting Council to evidence energy company audits as having failed to alert shareholders and insurers to the potential litigation / compensation costs of the unlawful activity.

My contact with the police includes providing evidential documents to the Director General of the National Crime Agency, and liaison with my local constabulary. Having recorded numerous #EnergyFraud victims being turned away by the police, a senior detective is reported as alerting the College of Policing to the lack of training for police officers on corporate crime.

It is notable that, despite the provision of documentary evidence to confirm persistent harassment and the most egregious breaches of the Equality Act, the Equality and Human Rights Commission has declined to provide litigation funding support to disabled victims of energy fraud. Indeed, EHRC lawyers appear to be playing the legal privilege card in much the same way as Post Office lawyers have done.

To my knowledge, none of the involved lawyers within regulatory / law enforcement bodies have reported energy company lawyers to the Solicitors Regulation Authority (SRA), despite being in possession of evidential documents that confirm ongoing dishonesty and criminal conduct by both internal and external energy company lawyers. The SRA has a Red Alert procedure for this specific purpose that is well known to layers.

Example Case Study

E.On domestic consumer with multiple disabilities including severe / extreme PTSD:

·        A decades long history of overbilling identified by customer, each time requiring protracted engagement to achieve resolution

·        2017 - complete collapse of customer billing data

·        2019 - pursuit of payment of monies not owed, warrant application followed by written apology from E.On to customer for initiating proceedings whilst Ombudsman process ongoing

·        2020 - Ombudsman identified over £1400 of overbilling in previous two years but failed to properly investigate billing data corruption

·        2021 - March onwards - despite customer’s PTSD being included on Priority Services Register, multiple unannounced harassing visits to customer home by E.On employees demanding payment of monies that the company knew not to be owed. E.On had previously acknowledged problems with its billing records. Customer asserted that E.On owed money based on provided evidence of faulty metering and overbilling.

·        Customer’s NHS treatment for PTSD had to be halted because of E.On activity.

·        October 2021 - E.On broke into customers home - force-fitted PAYG smart (SMET2) meters despite previous engineer’s visit confirming that layout of house made it unsuitable for smart meters.

·        November 2021 - smart meters failed during extreme cold weather event. E.On missed deadline for emergency call out that was eventually attended by specialist smart meter replacement engineers recruited from office staff. Customer was left without a top-up card in circumstances where they had been advised not to venture outdoors for medical reasons. E.On admitted that its online retailer list for top-up card supply was out of date and that there were no suitable retailers within a three mile radius.

·        2021-2023 - multiple failures by police to take action on harassment and fraud, despite their previous advice.

·        E.On persisted in issuing wildly varying demands for payment of monies owed, to include a bill for immediate payment of £17,600 on the run up to Christmas 2021.

·        September 2021 - August 2022 ongoing written complaints from customer met with E.On assurances that a full investigation would be carried out.

·        September 2022 - engagement with customer by E.On senior billing specialist who, having commenced his investigation, immediately resigned from the company. The billing specialist confirmed that a refund of over £7,600 due to the customer was only the first component of monies owed to the customer but that he would try to ensure continuity of investigation after his departure. No further billing resolution contact. E.On’s General Counsel promised full investigation which didn’t happen. Instead, E.On passed case to external lawyers.

·        2023 - persistent obfuscation by external lawyers, including a refusal to respond to a pre-action protocol issued in April 2023. Despite a subject access request evidencing internal E.On records demonstrating knowledge of the company’s failure to properly investigate, E.On has refused to admit liability. Internal records of billing system failures cited as legally privileged.

·        Ongoing litigation activity had previously been referenced by the victim’s NHS treatment provider as a bar to treatment of PTSD. The disabled customer has been left with long-term health issues related to the forced cessation of medical treatment, is unable to work, and currently faces the prospect of losing his home. It has proven to be impossible for the customer to find legal representation prepared to work on a complex case at legal aid rates. Despite serial breaches of the Equality Act by E.On, the EHRC has, so far, refused to consider the case for litigation funding. A clear Article 6 issue in relation to access to justice.

·        Billing summary: Unpaid debt claimed by E.On: £17,600
         Monies owed to customer over lifetime of account: £12,000.
         Billing discrepancy: circa £30,000 on low usage domestic account.

·        Subsequent investigations have confirmed that E.On’s legacy billing system suffered catastrophic data losses from 2017 onwards with many records irretrievably lost. In conjunction with a rebrand to E.On Next, the entire customer billing data set was migrated to Kraken, a billing system developed by an offshoot of Octopus. Both Ofgem and Octopus were aware of the data corruption within the legacy billing system, and the likelihood of cross-contamination of customer records during any attempts to restore / rebuild the database.

Given the fragmented structure of UK regulatory and law enforcement provision, victims are being left to coordinate multiple organisations in their attempts to achieve scrutiny and governance over energy companies. It is incumbent upon government to provide a joined-up response.

I look forward to your contact to arrange a briefing, either face to face or via a web conference.

Yours sincerely

David Gale
Chief Information Officer - Serious Fraud Investigator