It’s been a torrid few months for the energy companies and the forcable fitting of prepayment meters since I last wrote about the subject for the Mirror.
Firstly, it became apparent [in an investigation by the Times] that despite assurances to the contrary, many energy firms were dramatically increasing the number of applications they made to the courts to force fit prepayment meters when people struggled to pay their bills. Around 345,000 applications were made last year, a huge increase on the previous year. And that’s just applications. Citizens Advice estimated that 600,000 people were forcibly moved on to prepayment meters in 2022. This rightly caused outrage. I’d previously been told that ‘only a small number’ of forced pre-payment meters were being fitted during the cost-of-living and energy crisis. Something that clearly wasn’t the case.
Then some energy firms admitted switching some smart meter customers on to smart prepayment meters remotely – despite assurances this would not occur over Winter.
Then cases began to emerge of people who were not that significantly in debt, or who were in financial difficulties which would have necessitated other solutions to support them through challenging times. Finally, some cases emerged of forced prepayment meter fittings at the wrong properties!
Regulator Ofgem stepped in, promising much stricter action about the forcible fitting of prepayment meters. Those proposals have just been announced… and it’s safe to say that they have not been universally acclaimed.
So what’s the deal with the new rules? How to prepayment meters work? And what do you need to know about this type of meter? Here’s my guide.
Pricing is now fairer
Let’s start with some rare good news, shall we?! Back in March, chancellor Jeremy Hunt announced in the budget that the dual price structure for pre-payment meters would be axed. This structure meant that people on prepayment meters – who tend to be struggling with financial matters more or stuck with more costly expenses like rent – paid more money for their energy.
‘From 01 July’ this unfair charging structure will be banned. This will mean people on prepayment meters will pay the same for energy as those on standard meters. This should save households affected about £45 a year each.
Frankly, it’s pretty outrageous that this was ever allowed in the first place. But at least it’s going soon. An estimated 4 million people will be affected by this decision.
What are the new changes proposed by Ofgem on the forcible fitting of prepayment meters?
The devil, as always, is in the detail. Firstly, Ofgem has issued a Code of Practice. This is not the same as a regulatory obligation which would make the instructions mandatory. These are the rules businesses are expected to follow though – and let’s be honest, any business that ignores the Code is likely to find itself in hot water. Ofgem is currently consulting on making the advice mandatory. You can read the full code here.
The Code sets out the hoops that energy firms must jump through before forcibly switching someone on to a prepayment meter (PPM). The new rules state that they must:
- Make at least 10 attempts to contact a customer before a PPM is installed
- Carry out a site welfare visit before a PPM is installed
- Refrain from all involuntary installations for the highest risk customers including:
- Households which require a continuous supply for health reasons, including dependence on powered medical equipment
- People over 85 years of age (if there is no other support in the house)
- Households with residents with severe health issues including terminal illnesses or those with a medical dependency on a warm home (for example due to illness such as emphysema, chronic bronchitis, sickle cell disease)
- Where there is no one within the household that has the ability to top up the meter due to physical or mental incapacity
- Give a £30 credit per meter (or equivalent non-disconnection period) applied on all warrant installations and remote switches as a short-term credit/measure to remove the risk of customers going off supply
There are also loads of rules around body cameras for people fitting the PPMs, retention of footage and audio and reassessment of the situation after debts have been cleared.
Businesses must also provide ‘monitoring data’ to Ofgem, which I hope will be published along with complaint statistics.
What’s the problem?
In some cases, the new rules simply don’t go far enough. In others, they are very much open to interpretation. For example:
- The rules say that the 10 attempts must be made over ‘multiple communications channels’ for three months before the fitting of a PPM. However, they don’t seem to set timescales for this. So a firm could, presumably, call and text you over a short period while you are away or indisposed.
- The definitions of high risk are rather extreme. I’m deeply concerned that these will inadvertently become the new yardsticks by which firms assess financial difficulties.
- Loads of people under the age of 85 should clearly not be put on to prepayment meters.
- Severe health issues requiring energy are ill-defined. What about someone with an electric wheelchair or mobility vehicle, for example? Or those people who don’t necessarily need a warm home, but require constant monitoring from energy consuming instruments?
- Which leads us to the ‘medium risk’ category which sets out a bit more information about who might qualify. But not nearly enough.
All of which poses yet more questions and the proposals have been roundly criticised. Do we want energy firms assessing the merits of our health, for example – and how are they qualified to do so? And what about energy firms effectively policing their own performance at first?
Sadly, my postbag is filled with examples of cases where people who sought help for financial difficulties under the existing rules have not been given the treatment and support they deserve. I’d like to see some major investments in customer service as a consequence.
What help is there if you are struggling?
There are a whole series of benefits, grants and other support available alrady for people who are older, vulnerable or in financial difficulties.
Regulator, Ofgem, has a list of all of the options available here.
The options are also covered in plain English here with Citizens Advice.
If you are in financial difficulties Ofgem says that you can ask for the following:
- A review of your payments and debt repayments
- Payment breaks or reductions
- More time to pay
- Access to hardship funds
- Advice on how to use less energy
- The option to go on the Priority Services Register – a free support service for a wide range of people struggling or who need support.
As I mentioned, I’m hearing that people are getting a highly variable service when they seek help. So don’t be afraid to push back and ask for the proposals in writing. If you feel that the business is not listening or helping – or they are making things worse – then you can take your complaint to the Energy Ombudsman for free. Make it clear to the business that you expect them to take no action against you while the matter is looked in to by the ombudsman.
It’s been suggested by the Government that there is a need for cheaper ‘social tariffs’ for people who fall in to these categories but as yet, these have not been agreed. So watch this space and the Mirror team will keep you updated with all the new energy developments as they happen.
Featured in Mirror – Martyn James