Energy Regulator Calls for Action Over Costly Pre-pay Meters

June 30, 2015

Ofgem, the UK’s energy industry regulator, has called for a clampdown on the practice of gas and electricity suppliers installing pre-pay meters at significant cost to consumers.

The watchdog wants to see an end to policies that see end users of energy services paying up to £180 to have meters installed in their homes and almost as much to have the meters removed.

High among the list of concerns expressed by the organisation on the subject is that low-income households and people heavily in debt are among those most likely to be hit by charges for meter installations.

“Ofgem is concerned that charges and costs for using a pre-payment meter fall on those least able to afford them,” said Philip Cullum of Ofgem in a statement.

“That is why we want to remove barriers, deliver greater protections and offer more choice for pre-payment customers to ensure they are able to find the best possible deals.”

Ofgem has said it is hoping to see charges to customers for the installation or removal of pre-pay energy meters in the UK abolished before the end of this year.

Energy suppliers are currently able to gain court orders to demand that indebted customers have pre-pay energy meters installed in their homes. The meters mean that some households are only able to access gas and electricity supplies if they first buy tokens or top up an energy card.

According to Ofgem’s figures, 40 per cent of energy suppliers in the UK currently charge their customers to install a pre-pay meter in their home and 5 per cent charge for them to be removed. The rest do so for free, which the watchdog would like to see become the norm across the board.

“Pre-pay energy consumers pay more for a second-rate service,” commented Gillian Guy, chief executive of the charity group Citizens Advice. “Too many pre-pay customers can also feel locked out of the best deals by unfair charges.”

Figures obtained recently by the BBC show that as many as half a million pre-pay energy meters were forcibly installed around the UK by energy companies over the course of the last six years.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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