Ofgem vows to tackle ‘inappropriate energy supplier pre-payment meter practices’

Ofgem is to review the checks and balances energy firms have around placing customers on pre-payment meters, warning it will take further legal action if it finds they are not taking due care.

In a blog, the watchdog’s 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 follows 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.

Tom Marsland, from disability equality charity Scope, said: “For over a year, we have been regularly hearing from disabled people who have been forcibly moved on to prepayment meters because they could not afford the rising costs of energy. But prepayment meters are not the answer for disabled people who are freezing in their homes, or parents who are going hungry to feed their children.

“The Government must now ban energy companies from forcibly putting customers on to pre-payment meters, which is cutting off lifesaving heating and electricity for disabled customers. The Government must also act now and work alongside Ofgem, charities and energy suppliers to set up a social tariff as an urgent priority.”