Energy firms installed nearly 100,000 prepayment meters before Shapps crackdown
Energy suppliers pushed through the forced installation of nearly a hundred thousand prepayment meters last year as households grappled with record bills, before a government crackdown last month.
New figures from the Department for Energy Security and Net Zero revealed over 94,000 prepayment meters were installed under warrant in 2022, an average of 7,500 meters per month,
DESNZ Secretary Grant Shapps has condemned the figures as a “clear and horrifying picture of just how widespread the forced installation of prepayment meters had become.”
The data also shows that three suppliers – British Gas, Scottish Power, and Ovo Energy – were responsible for over 70 per cent of all forced installations with a total of 66,187 devices fitted under warrant.
Scottish Power tops the list as the worst offender when taking into account their customer base – force fitting over 24,300 in their customer’s homes in 2022.
Prepayment meters allow customers to pay for gas and electricity on a pay-as-you-go basis.
This can help households to make decisions over energy usage with smart prepayment meters, and can also serve a function in preventing indebted households from racking up further costs and facing court action.
However, they are expected to be used as a last resort before court action, and not to be installed at households with vulnerable energy users.
Earlier this year, third party operators working for British Gas were recorded breaking into people’s homes and installing prepayment meters without assessing properly whether the customers were vulnerable, as part of a Times investigation into prepayment meters.
Ofgem subsequently asked suppliers to suspend court applications for prepayment meter installations – as first reported by City PM – which was later confirmed by the government.
The watchdog has extended the ban on forced installations of prepayment meters until a new code of practice is agreed by energy companies – with Ofgem currently investigating suppliers’ use of forced prepayment installations.
Companies have also been instructed to revisit their past cases and offer redress, such as compensation, to customers where these meters were wrongly installed and regulations have not been followed.
Shapps said: “Prepayment meters are right for some people, so I do not want to ban them outright, but I do have concerns that companies have not been treating their customers fairly, over an already difficult winter during which the government has tried to help families by paying around half the energy bill of the average household.”
“After my calls for change, I’m pleased that suppliers have made their actions public and agreed to put a stop to forcing prepayment onto vulnerable customers for good – but this cannot happen again.
“I will be watching Ofgem’s ongoing review closely so customers get the support they need – and those vulnerable consumers who have wrongly suffered forced installations get the justice they deserve in the form of redress.”
The government recently confirmed households on prepayment meters pay no more than other customers for their energy in its latest reforms to the sector.
British Gas, Ovo Energy and Scottish Power were all approached for comment.