Business and Energy Secretary Grant Shapps has called on energy suppliers to stop force fitting prepayment meters with many doing “nowhere near enough” to support vulnerable customers.
This is according to the Department for Business, Energy and Industrial Strategy (BEIS), with Shapps declaring he has written to energy suppliers in a bid to prevent prepayment meters being forcibly installed at homes. This has contributed to growing anxiety amongst consumers, the BEIS said.
Shapps has also written to Ofgem to call on them to do more to ensure suppliers protect vulnerable consumers. This includes revisiting its approach to enforcing supplier compliance, as well as the urgent publication of recent investigation outcomes into vulnerable customers.
In response, Ofgem’s CEO, Jonathan Brearley, declared that the energy regulator will take forward a more detailed assessment to check whether plans have led to improvements in regard to the support energy suppliers provide vulnerable customers.
This will focus on self-disconnections, remote switching and forced installations alongside the checks and balances companies have around any decision to forcibly put customers on prepayment meters. If any suppliers have not taken care in this process, Ofgem has threatened to take further legal action.
“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,” Shapps said.
“I am deeply concerned to see reports of customers being switched to prepayment meters against their will, with some disconnected from supply – and quite literally left in the dark. 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.”
Prepayment meters require consumers to pay for energy and gas in advance of their use on a pay-as-you-go basis. This is something that is recognised as a last resort for consumers. Shapps has criticised many of the energy suppliers for not doing enough prior to “forcefully” moving consumers onto prepayment meters without exploring alternative options.
Citizens Advice indicated that around 600,000 people last year had switched to prepayment meters due to being unable to maintain payments on energy bills.
Ofgem released a statement aiming to support the BEIS in preventing the mistreatment of households amid the energy crisis – something that has seen prepayment meter installations soar. Due to soaring energy prices, many on prepayment meters have been unable to pay for energy and thus have been cut off. Citizens Advice indicated that around 3.2 million had been affected in 2022.
The energy regulator stated that “many families have chosen prepayment meters an option principally to have more control over their budgets”.
However, Ofgem indicated many have had this option forced upon them due to poor practice from suppliers, declaring it is “simply not acceptable” that vulnerable customers are left in the dark and cold. Ofgem also stated that it does not have the legal power to completely ban the forced installations of prepayment meters via the courts.
“Switching users onto a prepayment plan should only ever be a very last resort and suppliers have a duty to exhaust all other avenues. It cannot be right that, at a time when consumers need compassionate treatment more than ever, so many are being let down in this way,” said Graham Stuart, the Minister for Energy and Climate.
“The government will continue to do all we can to ensure families and households stay warm this winter and we’re taking urgent action to bring about greater transparency when it comes to bad energy supplier practice.”
Ofgem confirmed it will look at rules around mandatory moves to prepayment meters when a court warrant can be applied for, and the steps that need to be taken first. This surrounds an increasing call for suppliers to be more transparent with practices around data.
“We welcome the government’s call for energy suppliers to stop forcing people onto prepayment meters. Millions of people are being left in cold, dark and damp homes because they can’t afford to top up their meter. No one should be forced to live like this,” said Gillian Cooper, head of energy policy for Citizens Advice.
“It’s now up to suppliers to do the right thing and end this practice. If they don’t, the government must step in with stronger action. It’s also vital further protections are brought in for people already using prepayment meters.”
Graham Stuart has asked energy suppliers, Ofgem, Energy UK and Citizens Advice to meet with him at the Department for Business, Energy and Industrial Strategy to discuss matters further next week.
