Personal Finance

British Gas to stop remote switching to prepayment meters as crackdown launched

British Gas will stop switching cash-strapped smart meter customers onto prepayment meters automatically as the Government announces a crackdown on energy suppliers.

Hundreds of thousands of smart meter customers have been switched to more expensive prepayment meters when they struggled to pay their bills in the last year.

Energy regulator Ofgem said this has left some households without power for days or weeks, NimbleFins previously reported.

Chris O'Shea, chief executive of British Gas said the company would stop switching smart meter customers remotely, but did not rule out forcibly installing prepayment meters in homes, the BBC reported.

British Gas will spend an extra £10 million on customers in need, including grants of up to £250 for people unable to top up their meters.

Mr O'Shea said: "We know that some prepayment customers are self-disconnecting and not coming forward for help, so we have reviewed our policies to do more to target support at this group."

ScottishPower will stop recovering debt from customers who have been switched to prepayment meters, the Guardian reported earlier this month..

Prepayment meters charge more than standard tariffs and work by customers topping up their credit. This pay-as-you-go format can help customers avoid debt. But while those not on prepayment meters have continuous access to energy and are billed at set times throughout the year, once prepayment meter credit is used up, the household can't access power. There is also added hassle, time and travel costs involved with prepayment meter customers having to top up their credit.

There are rules in place that mean a customer can’t be moved onto a prepayment meter without energy companies first trying to secure financial help and carrying out assessments. But about 600,000 people were switched to prepay meters in 2022, up from 152,000 in 2021, Citizens Advice estimates. And smart meters mean this can be done remotely, without the need to gain a court warrant to access a property and install the technology.

Business Secretary Grant Shapps has urged energy companies to stop forcing customers onto prepayment meters, and vowed to name and shame worst offenders.

Mr Shapps said: "Suppliers are clearly jumping the gun and moving at-risk customers onto prepayment meters before offering them the support they are entitled to - I simply cannot believe that every possible alternative has been exhausted in all these cases.

"Rather than immediately reaching for a new way to extract money out of customers, I want suppliers to stop this practice and lend a more sympathetic ear, offering the kind of forbearance and support that a vulnerable customer struggling to pay should be able to expect.”

The Business Secretary wants energy suppliers to share the number of warrants they have requested to bring more transparency to the process.

Citizens Advice wants the practice of switching households onto prepayment meters banned. But Energy UK said: “If the option to install a prepayment meter - after exhausting other options - is removed, then it needs to be acknowledged that this will lead to a significant increase in bad debt, which has already been rising steeply in recent months, and is ultimately recouped from customer bills.”


Image courtesy of / Serge Cornu.

Helen Barnett

Helen is a journalist, editor and copywriter with 15 years' experience writing across print and digital publications. She previously edited the Daily Express website and has won awards as a reporter. Read more here.


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