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Energy industry regulator Ofgem has sent an alarming warning over the growing number of households with smart meters that are being shifted onto more expensive plans remotely, hiking up bills without warning for many and in some cases and leaving “vulnerable customers” without power for weeks. Energy firms can reportedly use smart meter technology to switch customers who are in debt onto a prepayment meter plan without even requiring a warrant (which is usually required to go into a house and install a prepayment meter box).
As prepayment tariffs are more costly than ordinary meter tariffs, the switch can leave households who are unable to pay the extra cost at serious risk, particularly if they are unaware that their supplier has changed their payment plan at the simple push of a button.
Energy firms are also capable of docking debt from the top-ups, with households that are unable to top up their meters at risk of being disconnected from their power completely.
It is a very simple process for an energy supplier to swap a customer onto prepayment mode once a smart meter – which is a are self-reading gas and electricity meters that shows how much energy you’re using – is installed
Under normal circumstances, energy firms would have to apply for a warrant and install a physical box, likely giving households longer to prepare for the switch and would at least give them some warning. Under prepayment meter plans, customers have to pay for their gas and electricity up front.
According to data from Ofgem, over 152,000 households with smart meters were remotely switched to more costly prepayment plans by their energy supplier last year. And 60,000 households had been switched in just the past three months alone.
Kelly, who did not want to reveal her full name to the BBC, said her bills more than double from £200 a month to more than £430 as fuel prices skyrocketed for millions of Britons amid an energy crisis.
The mother-of-two, who works part-time and receives £320 Universal Credit per month, told the BBC she ended up in around £1,000 in debt as she struggled to cope with the surging prices.
She said: “I’ve been calling EDF on and off since January to sort it. Then I got a letter saying they would change me on to prepayment.”
But when Kelly tried to contact EDF again, she claimed that communication on their end was poor and that her case was not properly updated. The n in October, she was suddenly told that she was now on a prepayment meter plan.
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She said: “I suddenly only had £3 on my electric until payday. I was so unhappy.”
But EDF has stressed that switching customers on to prepayment meters is only used as “a last resort” after repeated efforts to come to an agreement and resolution with customers.
A spokesperson told the BBC: “In this situation, moving a customer to pay-as-you-go will prevent them from continuing to accrue debt at an uncontrollable rate and prompt the customer to take control of their ongoing energy payments.”
According to Ofgem rules, energy suppliers are required to have effective checks and balances in place when switching the payment plan of a smart meter.
Rosi Avis, head of the Manchester branch of charity Citizens Advice that people may disconnect themselves from the energy grid unknowingly if they are not aware that they need to top up their prepayment meters to keep the house warm and the lights on.
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She said that “if customers are unaware that they are on a pre-payment meter they might not top up and therefore they are more likely to self-disconnect from their gas or electric,” adding that switching households remotely is “disconnection by the backdoor”.
Neil Lawrence, director of retail at Ofgem sent energy companies a stern warning: “Smart meter pre-payment switches are on the increase, and we do monitor that data.” This should only be when it’s safe and practical to do so, and smart meters should not be switched without those appropriate assessments taking place, including identifying vulnerability,” he added.
“Ofgem has written to all suppliers to urgently remind them of their obligations. Where they fail to do so, we will take action against them.”
National Energy Action (NEA) has accused energy companies of “leaning on both smart and traditional prepayment meters as a revenue protection mechanism”.
Matt Copeland, from the NEA, said: “National Energy Action would like to see a moratorium on all prepayment meter installs this winter. Whether traditional or smart, the rules and safeguards that govern prepayment meter installs are equivalent. Suppliers must ensure that they follow them.”
Richard Neudegg, from Uswitch, a price comparison service and switching website, said the recent rise of prepayment meters in the last few months was “worrying” as the Government’s energy price guarantee is set to end April, warning that households could be “plunged into darkness” if they cannot afford to top up the metre.
This comes at a time when energy bills are on average double what they were last year, and amid a cost-of-living crisis with soaring inflation, is seeing an increasing number of households get pushed into fuel poverty.
End Fuel Poverty says there is an estimated 7 million Britons in fuel poverty, but warns that this number could rise to over 10 million once the Government’s energy price guarantee , which has frozen bills for typical households at £2,500 since October was originally set to last for two years, ends in April. According to forecasts, the average consumer will be expected to pay £3,702 a year if the Government does not step in with a new plan to limit bills, consultants Cornwall Insight has warned.
A spokesperson for the Department for Business, Energy & Industrial Strategy said: “We understand this is a difficult time for families, which is why we have put in place immediate support including the Energy Price Guarantee, which is saving the typical household around £700, in addition to providing the most vulnerable households with £1,200 each this year on top of the £400 support that households are benefitting from.
“We expect suppliers to fully comply with their obligations and welcome the steps Ofgem is taking.”
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