Forced prepayment meter installations for over 85s banned in Ofgem crackdown
UK energy suppliers have all signed up to a new code of practice for customers, overseen by Ofgem, as part of an industry crackdown on forced installations of prepayment meters.
New rules include energy firms having to make at least 10 attempts to contact a customer before a prepayment meter is installed and refraining from involuntary installations for people with a medical dependency on warm homes.
Meanwhile, energy users over the age of 85 without someone else in the home will also be exempt from forced prepayment meters.
All warrant installations and site welfare visits will now require the lead representative for the supplier to wear and audio or body camera, which will be available for audit.
Alongside new rules on household visits, energy firms will need to give £30 credit per meter on all warrant installations and remote switches as a short-term measure to remove the risk of customers going off supply.
Suppliers will be expected to later re-assess each case once a customer has repaid debts owed.
They must contact the household to offer an assessment of whether a prepayment meter remains the most suitable and preferred payment method of choice for consumers.
If any prepayment meter customer is clear of debt and wishes to move off a prepayment meter – the supplier must agree where the customer passes any required credit checks.
The new code was developed in consultation with Citizens Advice and Energy UK and will be subject to new detailed monitoring from Ofgem.
It separately investigating suppliers’ use of forced prepayment installations in a market compliance review.
If Ofgem finds major concerns with any supplier following its review, it will ask the energy firm to take corrective action before the regulator permits them to restart prepayment meters.
Ofgem urged by Shapps to toughen regulations
The latest announcements follows fresh scrutiny on suppliers after third party operators working for British Gas were recorded breaking into people’s homes and installing prepayment meters without assessing properly whether the customers were vulnerable, as part of a Times investigation into prepayment meters earlier this year.
Ofgem subsequently asked suppliers to suspend court applications for prepayment meter installations – as first reported by CityAM – which was later confirmed by the government.
The watchdog maintained the ban on forced installations of prepayment meters until a new code of practice was agreed by energy companies.
Ofgem has also faced criticism from energy security secretary Grant Shapps, who accused the watchdog of having “the wool pulled over their eyes” by the suppliers they are supposed to be regulating.
He argued Ofgem had become too trusting of energy firms when it came to prepayment meter installations.
Prepayment meters require users to pay for energy before using it – with each meter topped up by the energy user normally with a smart card or token.
The devices can often be helpful for people to manage bills, but they are not suitable for some vulnerable consumers and forced installations are expected to be a last resort when all other options have been exhausted.
However, energy suppliers pushed through the forced installation of nearly a hundred thousand prepayment meters last year as households grappled with record bills.
Figures from the department for energy security and net zero revealed over 94,000 prepayment meters were installed under warrant in 2022, an average of 7,500 meters per month,
Jonathan Brearley, chief executive of Ofgem, said: “We will be turning this Code into clear rules and regulations, and will be assessing its impact and taking further views from stakeholders as we do so. Equally, we continue to work with government and others to tackle wider affordability issues and move towards a sustainable, longer-term solution to ensure energy needs are affordable for all consumers, such as a social tariff and, eventually, cheaper, renewable, homegrown energy for all.”
Ofgem will now consult on whether to make the code part of the industry’s legally enforceable licence conditions and guidance.
This will build on existing rules, regulations and guidance which suppliers are required to follow.