Personal Finance

Households being switched from smart meters to more expensive prepayment meters without warning

A rising number of energy bill payers have been shocked to discover their smart meters have been remotely switched to costly prepayment meters without their knowledge or permission.

Smart meters were brought in to save customers money as they have more knowledge and instant information about what they are being charged, with this data going directly to suppliers so they don't have to estimate usage.

But they also give energy suppliers the control to switch the customer to a prepay plan at the touch of a button, rather than try to gain access to a property to install a physical box.

More than 152,000 households were switched from smart meters to prepayment meters last year, the Daily Express reports.

About 60,000 have been switched in the last three months.

Energy regulator Ofgem said some had been left without power for days or weeks.

Prepayment meters usually charge much more than standard tariffs. They work by customers topping up their credit, but once it is used the household won't be able to access power. This is unlike those on smart meters who are billed at set times through the year and continue to have access to energy.

But customers are often switched on to prepayment meters when they are unable to pay their bills.

Citizens Advice believes 450,000 people could be forced onto prepayment plans this winter, with 180,000 being switched remotely.

They called it "disconnection by the backdoor".

Rosi Avis, of Manchester's Citizens Advice, told the BBC: "If customers are unaware that they are on a pre-payment meter they might not top up and therefore they are more likely to self-disconnect from their gas or electric."

The charity said it has seen a 158% increase in cases of people being forced onto prepayment meters in the last year.

Ofgem said energy suppliers must address the issue "urgently" and it will not hesitate to "take action" if failings are found.

They advise people struggling to pay their bills to speak to their supplier. Under Ofgem regulations, energy companies must offer payment plans the customer can afford.

Those on prepayment meters can ask for emergency credit from their supplier if they are unable to top up.

NimbleFins has written a guide on what to do if you can’t afford your energy bills.

Tips include applying for a grant, checking if you’re entitled to benefits, and using the Breathing Space scheme.

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.


NimbleFins Newsletter

Get energy alerts, deals, tips, news, and more!