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Chief Executive Officer’s of Energy suppliers have been reminded of their responsibility to treat customers fairly when installing involuntary prepayment meters, ‘Pay as you Go’ meters, and that they must follow Ofgem’s new rules or face tough action and fines.
The warning from Ofgem’s Director General for Markets, Tim Jarvis, in a letter, comes as the regulator confirmed three energy companies have provided evidence and assurances that they have met the regulator’s conditions to restart involuntary installations as a matter of last resort.
The regulator also urged households to reach out to suppliers as soon as possible if they think they will struggle to pay their bill so they can get support, and take their complaint to the Ombudsman if they are unsatisfied with the outcome. In 2023, the regulator increased the requirements on companies to proactively reach out to customers who need help and prevent debt building up.
Ofgem confirmed today (Monday 8 January 2023) that EDF, Octopus and Scottish Power have been given permission to restart involuntary PPM installations after meeting the regulator’s set of conditions, which include conducting internal audits to identify wrongfully installed PPMs and committing to reinstating non-prepayment methods and offering compensation. Suppliers must also provide regular monitoring data to Ofgem, so that concerning trends on involuntary PPM practices can be identified early.
The regulator also announced that if suppliers install a PPM in a property occupied by someone in the ‘do not install’ category set out in Ofgem’s Supplier Licence Conditions, and have not followed the rules in full set out by the regulator to make sure a prepayment meter is appropriate, they are expected to reinstate a credit meter within 24 hours and compensate their customers appropriately.
Ofgem is reminding supplier Chief Executive Officers that the rules must be followed to the letter to avoid a re-run of some of the practices seen last year where vulnerable customers in energy debt were being moved onto PPMs without their consent.
Tim Jarvis, Director General for Markets at Ofgem, said “Protecting consumers is our number one priority. We’ve made clear that suppliers must exhaust all other options before considering forced installation of a prepayment meter, and consumers can help themselves by reaching out to their supplier as soon as possible if they think they won’t be able to pay their bill, so payment options can be discussed. Our rules on when, and how, a prepayment meter can be installed are clear and we won’t hesitate to take action if suppliers act irresponsibly.
“While nobody wants to see the practices uncovered last year repeated, we also know that allowing households to build up unsustainable amounts of debt isn’t the right thing to do either. Many households value the control that these pay as you go meters offer over bills and how they can help with budgeting, and suppliers must also be able to recover debt to make sure those costs don’t end up on everyone else’s bills.
“We will continue to work closely with consumer groups and suppliers to make sure households understand their rights when it comes to prepayment meters, and will regularly review our rules to make sure they are working to protect the most vulnerable. I’d also strongly encourage consumers to make sure their personal details and circumstances are up to date with their supplier, so they can be taken into consideration if or when payment problems arise.”