Energy suppliers have been banned from forcibly installing prepayment meters for people over 75 years old with no support in their house and in homes with children under the age of two, Ofgem has announced.
The regulator has confirmed that the code of practice for the involuntary installation of prepayment meters (PPMs) will be made mandatory while also extending protection against forced installations for the most vulnerable households.
A voluntary code of practice governing the installation of prepayment meters, which all energy companies signed up to in April, was put in place after evidence emerged of bad behaviour by suppliers severely affecting struggling customers.
Currently, no suppliers are carrying out involuntary installations and face severe penalties if they do unless they meet strict criteria set by Ofgem.
Under the new rules, which come into effect on November 8, suppliers must ensure they are acting in a fair and responsible way with involuntary installations used only as a last resort.
Protecting the most vulnerable consumers is at the heart of what we do, and this decision not only cements the protections Ofgem put in place for people deemed most at risk, it goes further to protect the most vulnerable households— Neil Kenward, Ofgem
Neil Kenward, director for strategy at Ofgem, said: “Protecting the most vulnerable consumers is at the heart of what we do, and this decision not only cements the protections Ofgem put in place for people deemed most at risk, it goes further to protect the most vulnerable households.
“Prepayment meters are an important payment method that help millions of households to manage their energy bills, but they are not suitable for everyone.
“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.
“Ofgem will be monitoring suppliers’ behaviour closely to ensure they are complying with the spirit and letter of these rules. If that is not the case we will not hesitate to take action.”
Following a public consultation over the summer, the code will become part of suppliers’ licence conditions, and breaking the rules could result in enforcement action and “substantial” fines, Ofgem said.
Initially, the no-install rule applied to customers aged 85 and over with no other support in their home, or households with residents with severe health issues including terminal illnesses or those with a medical dependency on a warm home.
Ofgem said dropping the upper age limit to 75 and adding homes with very young children will ensure more people are protected this winter.
Dhara Vyas, deputy chief executive of industry body Energy UK, said: “Ofgem has previously acknowledged that the new process will result in fewer installations and an increase in consumer debt – in addition to that built up during the current pause.
“The extension of the exempt categories is likely to further increase the level of bad debt. It underlines the urgency of tackling the growing affordability crisis and the importance of stopping debts building up in the first instance.
“This winter is going to be very difficult for millions of energy customers. We continue to urge the Government to introduce targeted support for this winter and to press ahead with developing long-term targeted financial support – such as a social tariff – for those customers most in need, as well as improving the energy efficiency of as many homes as possible to cut bills permanently.”
