In 2023, the energy regulator asked suppliers to pause installing prepayment meters without a household’s permission. Since then, it has been checking how prepayment meters have been installed in the past as part of its ‘Market Compliance review’.

Ofgem has given energy suppliers guidelines they must follow when paying compensation to bill payers who had a prepayment meter installed without permission during the assessment period 1 January 2022 to 31 January 2023.

Energy suppliers will pay £5.6m in compensation using these guidelines to 40,000 customers who had a prepayment meter installed without permission during the assessment period. Energy suppliers will also write off a further £13m debt from customers who had a prepayment meter installed without permission during the assessment period.

This is on top of £55m of financial support provided directly to affected consumers by energy suppliers before completing the review in the form of hardship payments and debt write-off.

Citizens Advice Scotland (CAS) said the announcement is welcome news for people who have suffered distress as a result of forced installations.

CAS director of impact David Hilferty added: “We have always opposed forced installations as they take away people’s choice, pushing them to pay money upfront which they often can’t afford.

“Our network has seen many distressing cases over the years of people who have been forced to disconnect their heating supply or go into debt as a result of this, so it’s right that they should be compensated.

“What’s important now is that suppliers deliver this compensation quickly and do the right thing for those who have experienced unnecessary harm.”