Plans to end energy meter costs for most vulnerable customers

prepayment-meterOfgem has announced proposals to cap charges imposed by energy suppliers for the installation of pre-payment meters, and end them altogether for the most vulnerable customers.

Under current rules, suppliers can charge customers warrant costs when installing a prepayment meter (PPM) which can range from £200 up to £900. Typically the PPMs were installed under warrant to resolve situations where consumers can’t or won’t engage with suppliers to agree a debt recovery resolution.

In 2015, customers faced an average bill of £400 for having their PPM installed under warrant, risking pushing them more into debt.

Ofgem’s new proposals will place a firm limit on charges of £100 or £150.

Plans have also been included to entirely prohibit PPM warrant charges, and installations, for the most vulnerable customers. This includes people in financial hardship, and people with physical and mental health issues and learning difficulties.

Rachel Fletcher, Ofgem’s senior partner for consumers and competition, said: “It’s deeply unfair that struggling customers get hit with high warrant costs when they’re already grappling with debt, doubly penalising them.

“Ofgem’s role is to protect every consumer, including the most vulnerable. Suppliers need to help customers manage their debts.

“Suppliers need to ensure that PPMs are only installed under warrant as an absolute last resort. Where they are needed, our proposals will protect customers by limiting PPM warrant charges for all customers and removing them for the most vulnerable.”

Welcoming the proposals, Craig Salter, energy spokesman for Citizens Advice Scotland’s Consumer Futures Unit, said: “Warrant charges make it harder for customers who are already struggling to manage their debts. Installation charges can be up to £900, and on top of that, prepayment meters often mean customers will be on more expensive tariffs. This means that those in debt are frequently faced with higher gas and electricity bills.

“Energy suppliers should not be preventing customers from managing their debt through the imposition of unfair and excessive charges. Capping warrant charges, and ending them altogether for the most vulnerable consumers, is a step in the right direction, and will help to prevent customers who are already struggling to manage their bills being forced further into debt.”

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