Energy firms’ practice of forcing households on to more expensive pre-payment meters if they struggle with bills has been condemned as ‘not acceptable’ by energy watchdog Ofgem and business and energy secretary Grant Shapps.
Today Jonathan Brearley, chief executive of Ofgem, said he was ‘concerned’ about the rising number of pre-payment meters being fitted by energy firms regardless of customers’ wishes, and threatened legal action if vulnerable customers were harmed.
Brearley said: ‘I am concerned about the sharp growth in households struggling to pay their bills being switched over to pre-payment meters, sometimes without their even knowing about it, leaving them without heating.
He continued: ‘The numbers of forced installation of pre-payment meters is extremely high. It is simply not acceptable that vulnerable customers are left in the dark and cold in Winter.’
Energy firms can even swap smart meters over to being pre-payment at the flick of a switch
Yesterday, business and energy secretary Grant Shapps wrote a letter to energy companies urging them to stop fitting pre-payment meters by force as so many households struggle to afford the cost of living.
Here is everything you need to know about why energy firms fit customers with pre-payment meters – and your rights if it happens to you.
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Why are energy firms fitting pre-payment meters?
Currently there are more than three million households with pre-payment meters, and that number is growing fast.
That is because energy firms are forcing some customers to get these meters, which require you to pay in advance for any energy you use.
Energy companies are doing 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.
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More expensive: Customers with pre-payment meters normally end up paying higher prices for gas and electricity
What is the problem with pre-payment meters?
Simply, 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 last year.
Additionally, some energy firms are accused of being underhand in how they fit pre-payment meters.
Ofgem’s Brearley said one man in Glasgow went on holiday and returned home to find he had been switched to a pre-payment meter without his knowledge – and had no way to top up.
Your rights around pre-payment meters
Energy companies have the right to enter your home and fit a pre-payment meter, but they have to prove it is necessary and it has to be a last resort.
The same applies to them switching a smart meter to work as a pre-payment meter.
However, Ofgem’s rules say that energy firms have to check a household is not vulnerable before any pre-payment switch, and have to explain any extra help available.
So for example, a supplier cannot fit a pre-payment meter if it is not safe, or if disability or illness means you would suffer if your energy was cut off for non-payment.
Energy firms also cannot fit pre-payment meters if you cannot top up the device, for example because you live nowhere near a shop letting you do this.
If you are in debt to your energy supplier they must give 28 days’ notice before fitting a pre-payment meter.
Can an energy firm break into my home to fit a pre-payment meter?
No, they can only enter peacefully. They will need either your permission to enter and carry out the work, or will go to a magistrates court to get permission.
However, if they go to court they can add the cost of getting this warrant to any debt you owe them.
They must also give at least seven days’ notice before fitting a pre-payment meter.
Can I refuse a pre-payment meter?
No, if you are in debt with energy bills. Energy firms have the legal right to fit these devices, and even Ofgem cannot stop them.
However, if you think your supplier should not be fitting a pre-payment meter to your home, you can complain.
You can do this by speaking to your supplier first and putting in a formal complaint. If you do not hear back within eight weeks, or it has been eight weeks since they give a final decision, you can go to the Energy Ombudsman to make a further complaint.
This is a free process, and the Ombudsman acts as an independent assessor.
Gillian Cooper, head of energy policy at charity Citizens Advice, said: ‘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.
‘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.’