Energy firms banned from force-fitting pre-payment meters for over-75s

More households will be protected from having pre-payment energy meters forcibly fitted in their homes with new rules from regulator Ofgem.

A scandal erupted last winter when it emerged some energy firms had been forcing customers to have pre-payment meters, which rack up energy bills.

In response, energy regulator Ofgem temporarily banned the practice. In April 2023 it brought in a voluntary code for energy firms which said they should try everything possible before forcibly fitting a pre-payment meter.

The code also said firms never force-fit these meters for the over-85s, those with terminal illnesses or certain disabilities.

Meter ruler: Regulator Ofgem has toughened its rules on how firms can fit pre-payment meters

Today Ofgem has gone one step further by making the code compulsory and expanding it to the homes of the over-75s and those with children under two years old. 

If energy firms break the rules they face serious fines by Ofgem from 8 November, when the new requirements come in.

However, energy firms can still fit pre-payment meters without customers’ consent, so long as they abide by Ofgem’s rules. 

Ofgem director of strategy Neil Kenward said: ‘Today’s enhanced rules are there to provide protection from bad practice while ensuring that when needed, and as a matter of last resort, suppliers are using involuntary installations in a fair and responsible way.’

Energy firms have to make at least 10 attempts to contact a customer before a pre-payment meter is installed.

They must also carry out a site welfare visit before fitting any such meter.

Dhara Vyas, deputy chief executive of energy trade body Energy UK, said: ‘This confirms that involuntary pre-payment meter installations will be done as a last resort, with the proper consideration and support, and only in circumstances where it is safe to do so.

‘Such installations will still play an important role in enabling suppliers to meet their responsibility to try and prevent customers falling further into arrears – as well as limiting the build-up of bad debt overall, which is ultimately recouped from all customer bills.’

Why do energy firms fit pre-payment meters? 

Currently there are more than three million households with pre-payment meters.

Energy firms forced many customers to get these meters, which require you to pay in advance for any energy you use.

Energy companies do this because households are falling behind with energy bills.

However, another reason the number of pre-payment meters is growing is because some households are requesting them to help them limit how much they spend on energy bills.

A smart meter can be swapped to pre-payment remotely in many cases, without a visit from energy firm staff.

What is the problem with pre-payment meters? 

Vulnerable and hard-up households can end up paying more for energy, and are at risk of being unable to afford power when they need it most.

Customers with pre-payment meters pay more for their energy than those without, because pre-payment meters are more expensive for energy firms to operate. That cost gets passed on in the form of more expensive tariffs.

If a customer cannot afford to top up their meter, they get no power at all. Charity Citizens Advice said 3.2 million households ran out of credit at some point in 2022.

This post first appeared on Dailymail.co.uk