Ofgem has told energy suppliers in Britain to clean up their act after it received alarming reports of cash-strapped households being left without power for days or even weeks after being pushed on to a prepayment meter.
A recent analysis by the price comparison website Uswitch showed the number of people on a prepayment meter was rising for the first time since 2019 with thousands of Britons being switched every month as they struggle to pay higher energy bills.
Charities have warned that this practice risks “disconnection by the back door” when households cannot afford to top up their meter. Citizens Advice recently said more people had been unable to top up their prepayment meter in the first nine months of this year than in the whole of the previous three years combined.
Through its monitoring of suppliers and work with stakeholders Ofgem said it had become aware of “possible failings in how some suppliers treat vulnerable smart meter consumers, including some customers being switched to prepayment meters without full regard to the customer’s situation”.
“In extreme cases the reports we’ve received suggest this has led to some vulnerable customers being left without power for days or even weeks,” an Ofgem spokesperson said. “This is completely unacceptable, especially as we head into a very challenging winter.”
Ofgem’s retail director, Neil Lawrence, has written to suppliers telling them to “urgently” investigate the matter. The letter reminded them of their obligations to customers and that they must have effective checks and balances in place when switching the mode of a smart meter. The regulator would not “hesitate to take action off the back of this work where failings are found”.
The signs of growing consumer distress follow a recent decision taken by the chancellor, Jeremy Hunt, to roll back former prime minister Liz Truss’s pledge to freeze energy bill rises, reducing support from two years to six months.
The plan offers a £2,500 cap on the annual price of the typical dual-fuel bill until the end of April. After that point, support will be offered only to the most vulnerable people, with forecasters predicting that a typical household would face a rise in energy costs to more than £4,300 a year.
There were 7.38m homes using prepaid meters in the first quarter, up from 7.35m in the final three months of last year, according to the Uswitch report that looked at Ofgem data. Based on current trends it expects 10,000 meters to be switched over to prepayment each month.
What alarms campaigners is the danger of people “self-disconnecting. “Forcibly moving people in debt on to prepayment meters is disconnection by the back door,” said Gillian Cooper, the head of energy policy at Citizens Advice. “If people can’t afford to top up, they’re at real risk of the heating going off and the lights going out.”
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Ofgem said it had been looking more widely at how suppliers support vulnerable customers overall, such as those with disabilities. This work included how people are treated when they are switched to prepayment meters and the results of this work would be published soon, with ratings awarded for each supplier.
“We expect improvement plans to be delivered at speed and won’t hesitate to take punitive action where needed. Standards of service across the industry need to improve,” Ofgem added.
