Energy firms are being forced to pay the compensation after switching people onto prepayment meters, and at least 40,000 people are thought to be affected, according to energy regulator Ofgem.
As well as paying compensation to customers, energy providers will also write off some energy debt.
Who is eligible?
Ofgem said customers who had a prepayment meter installed without permission during the assessment period of 1-31 January 2023 are eligible for the compensation.
The affected suppliers are Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy, and Ecotricity. British Gas, Utilita and Ovo customers could also receive compensation later, but investigations into these companies have not yet concluded.
What you could receive
Affected customers could receive up to £1,000 each.
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Ofgem said you could receive £1,000 for the inappropriate installation, switch or use of a prepayment meter, £500 if a supplier didn’t take your vulnerability into account, £250 for unfair customer treatment, and £250 for insufficient debt support. Goodwill payments of £40-60 will be payable by suppliers on a case-by-case basis for process misalignment, data quality and record keeping.
If you think you are owed anything
The regulator said if you are entitled to compensation, you do not need to do anything, as you will be contacted by your energy supplier.
However, if you think you are owed something but haven’t heard anything, you can check with your supplier to see whether compensation is due.
New rules around meters
Since the prepayment meter scandal, there is a new code of practice on when meters can be installed without customer consent.
Clare Moriarty, chief executive of consumer group Citizens Advice, said this was good news for customers who have been affected by forced instalment of the meters.
She said: “The prepayment meter scandal must never be allowed to be repeated.
“As energy bills soared, suppliers broke into homes with no warning to force installation of prepayment meters, while those with smart meters were remotely switched to prepayment mode. It resulted in tens of thousands of people unable to afford to keep their meters topped up, often with devastating consequences.
“While it’s right that those rules have been tightened, it’s also vital that consumers get compensation for the distress that was caused.
“Three years on from this scandal, suppliers must work quickly to make sure those who were worst affected receive the compensation they deserve.”
