Personal Finance

Energy firms could be forced to pay customers compensation over wrongful meter fittings

Families could be entitled to compensation from energy firms if their homes were forcibly fitted with a prepayment meter, Ofgem has said.

Thousands of Britons have been moved on to prepayment meters when struggling to pay their bills this winter. Energy companies can remotely switch smart meter customers onto the prepayment tariff or can apply for a warrant to gain entry into a property to install a physical box.

Energy regulator Ofgem imposed a temporary ban on the practice after it was reported British Gas used debt companies to enter and install meters in vulnerable people's homes.

It also emerged that 30,000 warrants had been signed off by magistrates in January alone, with fears the applications were being waived through in huge groups without scrutinising each household's circumstances.

Prepayment meters are controversial because gas and electricity is more expensive than for those who pay after they have used the energy, due to added costs for the suppliers. Users also have the hassle of needing to regularly top their meters up with credit. NimbleFins previously reported millions of pounds in energy bill vouchers for those on prepayment meters had not been cashed despite users being some of the most vulnerable in society. While the £400 Energy Bills Support Scheme is automatically deducted from bills for households who pay retrospectively, those on prepayment meters were issued vouchers to cash in at the Post Office or PayPoint centres, meaning extra travel costs and time spent.

Ofgem yesterday confirmed the ban on fitting prepayment meters would last for six weeks until March 31 while it looks at whether new guidance needs to be implemented.

Its chief executive Jonathan Brearley today demanded energy suppliers also remove prepayment meters and offer compensation where they have been wrongly installed.

He told Radio 4's Today programme: "If you know people have had a prepayment meter inappropriately installed, fix it now.

"That means going back to that customer, asking them whether they want to continue on that meter, if they don't change that meter and offer compensation where appropriate."

Prepayment meter rules

  • Energy suppliers must first offer a payment plan for those struggling to pay their bills. They must also discuss the options to pay off debt.
  • Energy suppliers must give billpayers at least 28 days to pay back debt. If the payments are still not met they can say they will move the billpayer onto a prepayment meter.
  • The supplier can't enforce a prepayment meter switch if the billpayer is disputing how much is owed.
  • Those in very vulnerable situations can't be forced to have a prepayment meter if they don't want one.
  • Energy suppliers must give seven days' notice to install a gas meter and seven working days to fit an electricity meter. They are allowed to charge the cost of fitting the meter, although this is not common practice.

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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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