Martin Lewis gives voucher advice to those on prepayment meters
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Ofgem has ordered energy suppliers to remove the wrongly fitted prepayment meters and pay compensation to thousands affected by the practice. The energy regulator asked companies to do so now, rather than waiting for the outcome of the review they launched yesterday. The investigation will look into whether energy firms followed all the steps called for by their licence before prepayment meters were installed or supplies disconnected. This comes after reports emerged that energy suppliers were routinely obtaining warrants to enter forcibly enter people’s homes to install prepayment meters.
As household energy bills reached unaffordable levels for millions of households this winter, suppliers have been accused of routinely fitting thousands of prepayment meters to recover debts, and would even obtain warrants to enter vulnerable people’s homes.
Households who have such meters installed pay for their gas and electricity before they use it, on a pay-as-you-go basis through credit, usually with a key or smart card, and adding this to the meter.
It works if you use gas or electricity, the credit on the meter is used up. This form of energy payment is generally considered to be more expensive. According to the Money-Saving Expert, this is because it is more effort for the suppliers.
Their site says: “Providers prefer to get regular, automatic payments for your energy, which is what you get with direct debit payments on standard credit meters. This is why it’s the cheapest way of getting your energy.”
Currently, energy suppliers have agreed to halt prepayment meter installations, following an intervention from Energy minister Grant Shapps, however, this ban will only last until 31st March, which is when Ofgem’s review is set to conclude.
On Tuesday, Ofgem’s chief executive, Jonathan Brearley, said: “I’m telling suppliers not to wait for the outcome of our reviews and to act now to check that prepayment meters have been installed appropriately and, if rules have been broken, [to] offer customers a reversal of installations and compensation payments where appropriate.
“There will also be fines issued from Ofgem if the issue is found to be systemic.”
This comes after months of calls from charities, urging the Government to tackle the crisis, as these prepayment meters were being forcibly installed in the most vulnerable households.
Citizens Advice estimates that 600,000 people were forced onto a prepayment meter because they couldn’t afford their energy bills in 2022, compared to 380,000 in 2021.
This comes as Ofgem announced that British Gas is to be subjected to a “comprehensive, independent and wide-ranging review” following revelations its subcontractors were breaking into homes to fit prepayment meters.
It will also explore whether British Gas and its representatives assessed, prior to replacing their meter, whether their customers’ mental capacity or psychological state was such that the switch “would be severely traumatic” and make their condition worse.
Ofgem will also be evaluating whether those tasked with fitting prepayment meters had the appropriate skills to do so and were “fit and proper” to enter customers’ homes.
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Ofgem chief executive Jonathan Brearley told BBC Radio 4’s Today programme yesterday: “Clearly something has gone wrong in British Gas and what we’re announcing today is a comprehensive, independent, wide-ranging review into what has happened.
“To be clear, if we find those rules haven’t been followed those companies will be forced to make redress. That’s highly likely to mean they will have to put that meter right, they will have to pay compensation and, if it’s systematic, there will be fines for those companies.”
The fact that British Gas subcontractors were breaking into homes to install prepayment meters — including those of both disabled and mentally ill people — was exposed earlier this year following an investigation conducted by The Times.
Ofgem said that its investigation of British Gas and wider prepayment review will “support and protect energy customers when suppliers fit prepayment meters by force or via remote switch.”
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