Energy firms who inappropriately switch customers to pre-payment meters could face legal action, the energy watchdog has warned. Ofgem has said it will review the checks and balances energy firms have around placing customers on pre-payment meters.
It has warned it will take further legal action if it finds they are not taking due care. In a blog, Ofgem chief executive, Jonathan Brearley, said he is 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”.
It comes after Business Secretary Grant Shapps’ demand over the weekend that energy suppliers stop forcing financially-stretched households to switch to pre-payment meters. He also vowed to “name and shame” the worst offenders.
Mr Brearley said a review by the regulator last year of firms’ processes for dealing with the most vulnerable customers resulted in legal orders to improve and one company agreed to pay into Ofgem’s compensation fund, but he said the Business Secretary and Citizens Advice are “right to remain concerned”. Mr Brearley wrote: “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.
“Therefore, today, we will take forward a further, more detailed assessment to check whether plans have led to improvements. This review will focus specifically on self-disconnections, remote switching and forced installations, and the checks and balances companies have around any decision to put a customer on a pre-payment meter.
“If we find that they have not taken due care in this process, we will take further legal action against them.”
On Sunday, Mr Shapps said energy firms should first make greater efforts to help those struggling to pay their bills, such as offering credit or debt advice. He also asked suppliers to reveal the number of warrant applications they have made to forcibly enter properties to install meters.
Ministers have been urged to impose a moratorium on the forced fitting of prepayment meters, with Labour promising to take the measure. But the Government is resisting such a ban due to concerns over a subsequent increase in bailiff action.
It comes after hundreds of thousands of customers have been switched over to more costly prepayment meters, often unwillingly and without the offer of support, after failing to keep up with rising energy payments. Some have found their smart meters switched to prepayment mode remotely while others have been confronted at their door by teams sent by energy companies – armed with magistrates’ court warrants – to physically make the change.
Campaigners say those switched often then go without power as they cannot afford to keep the meter topped up – something that is referred to as “self-disconnection”. It comes after energy bills have soared due to rampant inflation and the impact of Russia’s invasion of Ukraine.
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