Prepayment meters: Ofgem orders energy firms to compensate customers - latest from watchdog
Energy regulator Ofgem is forcing firms to compensate customers over the forced installation of prepayment meters.
Ofgem is also ordering companies such as British Gas to remove prepayment metres that were installed ‘improperly’. The energy regulator has urged businesses to comply with the order as soon as possible.
Ofgem recently launched an investigation into how companies forcefully installed prepayment metres. It comes after British Gas came under fire following claims the energy giant used debt collectors to break into the homes of vulnerable customers and install the metres.
British Gas suspended future instalments of prepayment metres before Ofgem then asked all suppliers to follow suit last month. Jonathan Brearley, CEO of Ofgem, said the energy regulator has told companies it will review what they are doing and if they are following the rules.
It’s not clear yet how much compensation people could potentially get.
Mr Brearley said: “I am concerned about the way customers in already distressing situations are being treated when suppliers force them onto prepayment meters.
“I’m telling suppliers not to wait for the outcome of our reviews and to act now to check that PPMs have been installed appropriately, and if rules have been broken, offer customers a reversal of installations and compensation payments where appropriate.
“There will also be fines issued from Ofgem if the issue is found to be systemic. We are taking this issue extremely seriously and customers should feel reassured that where the rules have been broken, Ofgem will act.”
Up until Ofgem intervened, energy companies were able to apply for court warrants to enter homes and install prepayment meters if customers had fallen behind on their bills.
What are prepayment metres?
Prepayment metres are a pay-as-you-go form on energy bills and are common throughout the UK. Rather than pay on a monthly direct debit, customers on prepayment top up their meter at a local shop or online.
Prepayment meters are typically more expensive to operate than other types of meters, with cheaper tariffs not always available.