Energy firms told to compensate prepay energy victims
The intervention follows a damning report in The Times last week about agents hired by energy firms breaking into vulnerable people’s home to fit prepayment energy meters.
Ofgem subsequently launched an urgent investigation of British Gas. The energy giant has admitted being at fault by breaking into the homes of people with small children and medical conditions.
Shapps has given energy bosses until tomorrow to report back to him on what remedial action – such as providing compensation – they plan to take if they have wrongfully installed prepayment meters in customers’ homes.
Regulator told to ‘toughen up’
Shapps also told Ofgem to “toughen up” on energy suppliers. He called on the regulator to set up a new customer reporting system for households to pass on their own stories of how they are being treated – especially those who are vulnerable – and not just rely on energy firm bosses to share information with their regulator.
Business and energy secretary Grant Shapps said: “I am appalled that vulnerable customers struggling with their energy bills have had their homes invaded and prepayment meters installed when there is a clear duty on suppliers to provide them with support. They need to refocus their efforts on their consumers, the British public, who are at the receiving end of this abhorrent behaviour.
“I’m also concerned the regulator is too easily having the wool pulled over their eyes by taking at face value what energy companies are telling them. They need to also listen to customers to make sure this treatment of vulnerable consumers doesn’t happen again.”
Currently, energy suppliers are required to provide Ofgem with information to demonstrate how they comply with the rules on supporting vulnerable consumers, on customers struggling to pay, and on the fitting of prepayment meters.
But the business secretary wants to see the voices of consumers and those who champion their needs heard when deciding which energy companies are meeting expectations – with a customer reporting hotline being just one example it wants the regulator to consider.
Prepayment energy meters are a more expensive way to pay for energy than by direct debit or on receipt of a bill.
Citizens Advice has called on a complete ban of forced energy meter installations. The charity said it saw more people who can’t top up their prepayment meter last year than in the whole of the last decade combined. Customers who can’t afford to top up their meter effectively “self disconnect”.
Citizens Advice said moving a customer to a prepayment meter is effectively cutting them off from their energy supply, with one in five who had been cut off saying they spent at least 24 hours without gas or electricity, leaving them unable to heat their homes or cook a hot meal.
Energy firms are allowed to install prepayment meters into the homes of customers who are in debt, but only under certain circumstances and they must follow strict rules including offering alternatives and help with managing debts. See YourMoney.com’s Moving to energy prepayment meter: Everything you need to know.
On Thursday night last week, a number of suppliers announced they would suspend forced installations after being pushed by Ofgem to pause the practice while they reassure the regulator they’re complying with the rules.
Shapps said he has also demanded suppliers share the number of warrants they’ve applied for in recent months and plans to publish the findings.