The Insolvency Service and police have arrested four people in connection with an alleged £44m fraud targeting the government’s ECO4 home insulation scheme. BusinessGreen first reported the arrests, with MSN confirming the £44m figure. The scheme, which provides free or heavily subsidised insulation to low-income households, has been a cornerstone of the government’s net-zero strategy.
What the arrests mean for the ECO4 scheme
The ECO4 programme, which runs until March 2026, requires energy suppliers to fund insulation and heating upgrades in homes that meet specific eligibility criteria. The alleged fraud involves contractors submitting false claims for work that was not carried out or was substandard. BusinessGreen reports that the arrests follow a joint operation by the Insolvency Service and local police forces. MSN adds that the investigation is ongoing and more arrests have not been ruled out.
The catch is that fraud in government-backed energy schemes is not new. Similar cases emerged under the Green Homes Grant, which was scrapped in 2021 after widespread abuse. For the current ECO4 scheme, the government has introduced stricter checks, including mandatory TrustMark registration for installers and random inspections by Ofgem. But as this case shows, loopholes remain.
What it costs a typical 3-bed semi
For a homeowner in a typical 3-bed semi-detached house, the ECO4 scheme can cover the full cost of loft insulation (typically £300-£600) and cavity wall insulation (£500-£1,200). Without the scheme, these upgrades would come entirely out of pocket. But the fraud means that some of the £44m allegedly stolen could have funded legitimate insulation for thousands of homes. At an average cost of £800 per property, that’s roughly 55,000 homes left uninsulated.
For households not eligible for ECO4, the Boiler Upgrade Scheme offers £7,500 towards heat pumps, while local councils run their own grants through the Home Upgrade Grant (HUG2). The Energy Company Obligation (ECO4) is specifically for those on certain benefits or with low incomes. Checking eligibility is straightforward via the Ofgem website or a local energy advice centre.
How to protect yourself from rogue installers
The arrests highlight the importance of due diligence. Homeowners should only use installers registered with TrustMark, the government-endorsed quality scheme. Check that the installer is listed on the Ofgem ECO4 register and has a valid Gas Safe or MCS certification depending on the work. Ask for references and a written contract detailing the scope of work before any payment is made.
If you suspect fraud, report it to the Insolvency Service or Action Fraud. The government has a dedicated hotline for ECO4 complaints. For those already in the process, the scheme continues to operate normally. Ofgem has confirmed to MSN that no applications have been paused as a result of the investigation.
What next for homeowners
The immediate next step is to verify your installer’s credentials. If you have already had work done under ECO4 and are concerned about quality, contact your energy supplier or Ofgem. The government is expected to announce additional compliance measures in the coming weeks, possibly including mandatory photographic evidence of completed work.
For those considering applying, the process remains open. Check your eligibility on the gov.uk website or call the Simple Energy Advice service on 0800 444 202. The scheme is due to end in March 2026, but funding is allocated on a first-come, first-served basis. Don’t let fraud deter you, properly installed insulation can save a typical household £200-£400 a year on heating bills.
Frequently Asked Questions
Yes, the scheme is still open and accepting applications. Ofgem has confirmed to MSN that no applications have been paused or cancelled as a result of the investigation. Homeowners should continue to apply through their energy supplier or local authority.
Check that the installer is registered with TrustMark, the government-endorsed quality scheme. You can also verify their credentials on the Ofgem ECO4 register. Ask for references and a written contract before any work begins.
Report it immediately to the Insolvency Service or Action Fraud. You can also contact Ofgem's compliance team. If the work was substandard, you may be entitled to remedial work under the scheme's guarantee.
