Energy companies halt forced installation of prepayment meters

Following Energy Security Secretary Grant Shapps’ intervention last week, all energy suppliers have now committed to ending the forced installation of prepayment meters in vulnerable customers’ homes.

Concerns were raised about the sharp rise in companies seeking warrants to enter people’s homes to forcibly install prepayment meters, Mr Shapps wrote to energy bosses insisting they revise their practices and improve their action to support vulnerable households, to make sure prepayment meters being installed is a genuine last resort. As part of this, he asked all suppliers to set out their actions to support their customers, how many warrants they have each sought, and plans to redress any wrongdoing.

It follows the Energy Security Secretary launching a crackdown on the mistreatment of customers last month, where he charged the Energy Minister with meeting suppliers to explain their actions and called on magistrates to improve their scrutiny of the warrants crossing their desk. Just this week, Lord Justice Edis issued directions to magistrates courts to stop approving warrants to force-fit prepayment meters grinding the practice to a firm halt.

However, given the failure of the energy regulator to identify recent unacceptable behaviour such as that of British Gas – or other significant shortcomings – he told Ofgem to improve their oversight of these companies and toughen up on suppliers. Now in line with the Energy Security Secretary’s request, Ofgem has committed to speaking to consumers rather than just suppliers about their experiences.

Last week the Energy Security Secretary set suppliers a deadline to urgently report back on remedial action for customers who faced wrongful installations. All suppliers responded by the Energy Security Secretary’s deadline, committing to end the practice which breaches rules in place to protect vulnerable households, and setting out their plans for identifying those that may have had meters wrongfully installed. However, while several set out redress that would be provided to customers in this instance – such as providing compensation, or replacement of a prepayment meter with a credit meter – a number failed to address the question.

The Energy Security Secretary has therefore found most suppliers are falling short on correcting their ways and said halting forced installation is ‘only the beginning’ of fixing the ‘abhorrent’ practice of forcibly fitting prepayment meters into vulnerable customers’ homes.

Energy Security Secretary Grant Shapps said “People will have understandably been shocked and appalled at how vulnerable people’s homes have been invaded and prepayment meters installed against their wishes – and suppliers are only at the beginning of correcting this abhorrent behaviour.”

“Since those reports were published, I have demanded answers from suppliers, and Ofgem: all suppliers are now halting forced installations, magistrates are no longer signing off warrant applications and Ofgem are upping their game when it comes to their reviews.”

“But I am angered by the fact some have so freely moved vulnerable customers onto prepayment meters, without a proper plan to take remedial action where there has been a breach of the rules. So, I have only received half the picture as it still doesn’t include enough action to offer redress to those who have been so appallingly treated.”

“This is simply not good enough and absolutely needs to be addressed by Ofgem’s review – I want to see plans from suppliers actually acted upon – and customers given the service they have a right to expect.”

Commenting on the change, Adam Scorer, Chief Executive of fuel poverty charity, National Energy Action (NEA) said. “The Secretary of State is right to push for urgent action to protect vulnerable consumers. An immediate halt to forced installation of prepayment meters must be followed quickly with clarity on how many vulnerable households shouldn’t have had these meters installed, a suitable compensation package imposed by Ofgem, and then a full review of the prepayment market to see whether or not it can work for consumers and not just for suppliers.”

“There are over four million households in England and Wales on a prepayment meter. They’ve had the rough end of the energy market for far too long and many have struggled most to redeem UK Government support during the energy crisis. There are ways of making prepay work better for households who want, or need, to control their energy costs, but unless we see a huge shift in how prepayment works, this part of the energy market will remain wholly unfit for purpose, continuing to fail struggling households.”