Ofgem to Investigate Forcibly Installed Pre-Payment Meter Cases - Have energy companies breached the rules?

Ofgem to Investigate Forcibly Installed Pre-Payment Meter Cases - Have energy companies breached the rules?

Figures acquired by BBC Radio 5 Live indicate that over half a million pre-payment meters have been forcibly installed in peoples homes over the last six-years. Ofgem the energy watchdog has now taken it upon itself to investigate the circumstances surrounding the installation of these meters as they should only be used as a last resort and routine installation may amount to institutional bad practice.

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The figures were released by Ofgem under a Freedom of Information request and revealed that last year, 97,000 pre-pay gas and electricity meters were installed across the UK. Energy UK claim that pre-paying assists many people in managing their budget, however Citizens Advice have made clear that pre-pay customers get a "raw deal" paying £80 more per year on average than customers who pay by direct debit.

Director for credit and collection for British Gas, Brian Jackson said:

"When we go through a warrant process, ...it's after we've exhausted all of those other avenues to provide support that really helps keep customers on track."

However, Ofgem are not entirely convinced and are now looking into the reasons behind the great volume of pre-payment meters installed for a non-payment of a debt on a warrant visit. The body said:

"Suppliers can only install a pre-payment meter where it is safe and reasonably practical for the consumer to use. Suppliers are required to treat customers fairly."

Today at Unlock the law we look at how energy suppliers must treat you, and the process they must go through if you fall behind on your payments.

What is the problem with pre-payment meters?

Pre-payment meters mean that many customers are trapped in their pre-payment arrangement and cannot take advantage of the competitive energy market - they are unable to get a better deal on their energy, which may be seen to be unfair.

The umbrella body for energy supplier, Energy UK said that suppliers only fit pre-payment meters where they have obtained a court warrant and that this process is only used as a last resort to assist customers in managing their debt. Pre-payment meters allow customers to manage their debt where paying on a quarterly or monthly basis is not suitable for them. However, there is concern that suppliers are not adhering to their principles and forcing customers who fall behind on payments to get pre-payment meters routinely, rather than as a last resort.

When will a pre-payment meter be fitted?

If a customer is in debt to an energy supplier, the supplier may only agree to continue to supply your energy if you have a prepayment meter fitted. In many circumstances, this is the only alternative to being disconnected, especially if you have already failed to keep up with an arranged payment plan to pay off your debt.

It is unusual to be disconnected where you have fallen behind with your energy bill, as all energy suppliers must follow certain rules relating to how they treat customers who are having trouble paying their bills. Your supplier must offer you the opportunity to set up a repayment plan to pay off your arrears at a rate you can afford.

However, if your bill remains unpaid, your supplier can then apply to the court for rights of entry to enter your property and access your meter.

Your supplier must tell you in advance of their intention to apply for such a warrant. There will be a court hearing to determine whether the warrant will be granted and you may attend this hearing and have your say in front of the magistrate.

If the warrant is granted by the court, your supplier could disconnect you but it is most likely that they will fit a pre-payment meter if this is possible and if it is suitable for you.

What principles do energy suppliers need to abide by?

Major energy suppliers are bound by five important principles to ensure they treat customers who fall behind on their bills fairly. These are:

  • They must check whether you are a vulnerable person before forcing you to have a meter fitted and must offer a different method of payment if appropriate.
  • They must to consider changes to your circumstances if these mean that changing your meter is no longer safe or practical for you.
  • They must extend the emergency credit if you run out overnight or at Christmas or New Year.
  • Where you are considered vulnerable, but it is still safe for you to have a meter, they must offer more support including but not limited to advice on tariffs and benefits checks, or they can refer you to another organisation that offers benefit checks.
  • They must improve communication with prepayment meter customers.

If you believe your supplier has not abided by these principles you can make a complaint either to your supplier, or to the energy ombudsman. Read more about how to make a complaint here.

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For more consumer advice and to keep up to date with issues that may affect you, please read our consumer law guides.

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