Sometimes I read a headline that shocks me so much it stops me in my tracks.

This week, Citizens Advice announced that more than two million people faced being cut off from their gas or electricity this winter. You might think that figure can’t possibly be accurate, given the copious rules and regulations that are in place specifically to make it harder for energy suppliers to terminate your supply.

But there’s one very easy way that energy supplies can be cut off. One that allows suppliers to wash their hands of problems and say it’s not their fault.

There are around four million prepayment meters in the UK. With a prepayment meter, you pay for gas and/or electricity in advance, usually through a USB style ‘key’ or a card. You top up the key or card with credit at a paypoint and insert it in to the meter to ‘load’ it with the credit.

However, the main problem with prepayment is when you run out of credit, your supply cuts out. You will usually have a small amount of emergency credit to get you through a short timeframe, but when money is tight people tend to use this emergency credit regularly instead. But when that runs out, so does the power.

This means millions of people are being cut off without the energy company flipping the switch. This allows businesses to avoid direct blame for leaving people in dire situations at the height of winter.

According to Citizens Advice, 800,000 went without gas or electricity for longer than 24 hours last year and 1.7 million people were disconnected at least once a month. And terrifyingly, five million households are currently in debt to their supplier.

Why do we have prepayment meters?

I’m going to do my best to tackle energy debt in my column this week. But let’s start by asking a simple question.

Why do we have prepayment meters at all? After all, doesn’t this just mean we’re condemning people who have the least amount of money and the most financial pressure to potentially life-threatening situations? I think this is utterly outrageous. It’s time that the Government stepped in and forced the industry to come up with a realistic plan to help people who can’t afford to pay their bills.

This is necessary because in the last two days alone, I have spoken to three people who have told me about some behaviour by energy companies that is reprehensible. Including:

  • A woman with four kids including two under the age of two who has been cut off from her supply, in direct contravention of Ofgem’s rules.
  • A mother of a severely disabled child who has been told if she doesn’t pay her outstanding debt the full balance will be debited from her bank account (they can’t do this).
  • Another mother of a vulnerable child who has been told she has to have a prepayment meter – again in direct contravention of the regulator’s rules.

That’s in just the last two days.

As you may be able to tell, I am very, very angry. And I want you to be angry too. Tell your MP and speak to your friends and family to spread the word and share what the rules actually say, so people aren’t bullied in to impossible situations.

Here’s my guide.

If you’re already on a prepayment meter

If you’re stuck with a prepayment meter, then you already have to deal with the nightmare of loading the thing up. You can do this through PayPoint and Payzone outlets and a quick internet check reveals there are thousands of places around the UK where you can do this. But if the one nearest to you is closed then things can spiral out of control quickly. I’ve also been hearing from lots of readers who have problems with cards or keys that aren’t loading the credit.

If you are out of credit, you’ll need to contact the energy provider to see if they can give you temporary credit, which they can upload to the meter remotely. However, this means you’ll have to pay a proportion of that debt back every time you top up the meter. So if you have the same amount of money coming in each week or month, you’ll have less to spend in real terms on energy because of reducing that debt.

What happens if I keep running out of credit?

If you are continually in debt then the energy firm’s debt management procedures should kick in. If you are classified as vulnerable, then they should have identified this – but as the calls I’ve received this week alone have shown, the system fails far too often.

Citizens Advice have an incredibly detailed and useful guide for people on prepayment meters. Just type ‘prepayment meter help’ and Citizens Advice in to a search drive.

It can be deeply stressful and humiliating to have to keep asking the energy business for help, and I really do understand how hard this can be. Try to write down a few details about your financial situation in advance so you don’t get flustered and forget key things about your circumstances. Remember the energy provider will need a basic budget from you so they can assess how best to help you.

Even in worst case scenario, there’s always free debt charity StepChange to help people in financial difficulties and the equally free Energy Ombudsman if the energy supplier isn’t helping (more at the end of this article on both of these organisations).

How do I get rid of a prepayment meter?

The good news is you can switch from a prepayment to a standard meter for free if you’re not in debt. The bad news is there’s sometimes a backlog of requests, available meters and engineers to do the work. The push to get the nation on to smart meters may have been scaled back but it is still underway, which has contributed to the wait to get the meter changed.

If you’re on a regular meter but are in energy debt

If you don’t have enough money to cover an emergency when you’ve paid your essential outgoings each month then you meet the definition of ‘financial difficulties’. That means the energy firm must come up with solutions that meet your needs.

You’ll need to put together a brief overview of your finances. This is your gateway to getting help. This basic budget only needs to cover the money you have coming in versus your essential monthly payments and financial commitments (food, petrol, etc). The energy firm is allowed to ask you for this so they can figure out the best solution to your situation. Make sure you note down if you are worried about losing your job, or a source of money. Have a think about your home situation too. It can help to explain about the needs of your family, who the wage earners are and if anyone has specific needs or could be considered vulnerable or older.

If you really want to face down your finances, StepChange have a detailed budget maker here.

According to Ofgem’s regulations, the energy firm should come up with a tailored plan to meet your needs. You can read what businesses are supposed to do on regulator OFGEM’s website here.

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.

What if my energy supplier says it’s going to force me on to a prepayment meter?

The energy regulator Ofgem has created a code of practice that sets out the rules that energy firms must follow through before forcibly switching someone on to a prepayment meter.

Knowing the rules can be helpful, but you can stop the process in its tracks by saying you are in financial difficulties and asking the business to help you. They should also suspend prepayment fittings and debt collection activities while they investigate complaints – including Energy Ombudsman investigations.

The rules state that the business 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 

The Energy Ombudsman

The Energy Ombudsman is a free service created to help you sort out complaints about your gas or electricity provider. The Ombudsman was introduced so people who had a complaint with an energy provider that they couldn’t sort out don’t have to face the expense and complexity of going to court to resolve a dispute. You can contact them here.

The best bit is you don’t need to be an energy expert or have a legal background to have a higher chance of winning.

Get a free debt plan

If your financial difficulties look like they might be longer term, then speak to a free service like StepChange, a charity set up to help people get back on top of their finances. They’ll contact your creditors for you and negotiate payments you can afford. It’s not easy, but it’s a solution. Never pay for a debt management service – there are free options out there. And bankruptcy and IVAs are very much a final option. Don’t go there unless you are all out of other solutions.

Featured in Mirror – Martyn James

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