Major change for millions of energy customers as prepayment meter update issued
Three major energy suppliers have been given permission to restart forced prepayment meter installations after the practice was temporarily banned.
Ofgem had introduced the ban after an investigation by The Times found debt agents acting on behalf of British Gas were forcing entry into the homes of vulnerable people. Ofgem said the ban would lift "only when and if" firms follow a new code of practice. This includes conducting internal audits to identify when prepayment meters were wrongfully installed, and offering compensation and a return to a non-prepayment payment method to any affected customers.
In an update today, Ofgem said EDF, Octopus and Scottish Power have now met its set of conditions and will be allowed to restart "involuntary" installations. Each firm make at least ten attempts to contact a customer before a prepayment meter is installed and carry out a site welfare visit. They must also provide regular monitoring data to Ofgem.
But certain customers who are considered "highest risk" are still protected from forced installations. This includes households with health issues that need to keep warm, people over 75 with no support in their home, and those with children under two years old.
Ofgem director general for markets, Tim Jarvis, said: “Protecting consumers is our number one priority. We’ve made clear that suppliers must exhaust all other options before considering forced installation of a prepayment meter, and consumers can help themselves by reaching out to their supplier as soon as possible if they think they won’t be able to pay their bill, so payment options can be discussed.
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“Our rules on when, and how, a prepayment meter can be installed are clear and we won’t hesitate to take action if suppliers act irresponsibly. While nobody wants to see the practices uncovered last year repeated, we also know that allowing households to build up unsustainable amounts of debt isn’t the right thing to do either.
“Many households value the control that these pay-as-you-go meters offer over bills and how they can help with budgeting, and suppliers must also be able to recover debt to make sure those costs don’t end up on everyone else’s bills.”
He added: “We will continue to work closely with consumer groups and suppliers to make sure households understand their rights when it comes to prepayment meters, and will regularly review our rules to make sure they are working to protect the most vulnerable. I’d also strongly encourage consumers to make sure their personal details and circumstances are up to date with their supplier, so they can be taken into consideration if or when payment problems arise.”
Citizens Advice chief executive Dame Clare Moriarty said: “Last winter, we all saw that the rotten core of debt collection practice in the energy sector was not just a case of one bad apple – the rules were simply not being followed.
“As the temporary ban on force-fitting comes to an end, people need reassurance from suppliers that they won’t be wrongly forced on to a meter when there’s clear evidence they shouldn’t be. Ofgem must proactively monitor suppliers and act swiftly if there are any suspicions rules are not being followed.”
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “It is outrageous that energy firms are seeking to use the courts to force people on to prepayment meters in the middle of winter. These meters have the potential to leave them without heating in the middle of winter.
“We still have grave concerns about the processes energy firms have in place for assessing vulnerabilities. Late last year, Scottish Power were found to be trying to seek warrants to force vulnerable households on to prepayment meters. Ultimately, without a change in the law, we knew this day would come. MPs and ministers – who ignored pleas to introduce a full ban – can only hope that it is not their vulnerable constituents who are forced on to these meters.
“If anyone receives a court summons from their energy firm they must contact Citizens Advice, a local law centre or other advice provider as soon as possible to see if help is available to them. Customers should not ignore these letters as the consequences of doing nothing could be severe.”
Jonathan Bean, from Fuel Poverty Action, said: “We are horrified that Ofgem has taken the cruel and dangerous decision to allow Scottish Power and others to break into homes and limit energy supplies in the middle of winter. This will leave many people traumatised and cold.”
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