September 14, 2016
When a customer falls in to debt with their energy supplier, the supplier can force them on to a pre-payment meter and then charge them up to £900 for the installation.
Energy regulator, OFGEM, has now said that customers who are forced to install prepayment energy meters should be charged a maximum fee of £150. A proposal that has been welcomed by consumer charity, Citizens Advice.
Who does this apply to
As many as 4.5 million people use prepayment meters for electricity, while 3.5 million use them for gas.
Prepayment customers also face higher energy bills. Earlier this year the Competition and Markets Authority recommended that customers on prepayment meters should have their energy prices capped. This will come in to effect in April 2017 and households are expected to save £75 a year as a result.
At the moment, energy suppliers must come to an agreement with a customers that fall into debt. If no arrangement is sorted, then the energy supplier can apply to a magistrate's court for a warrant to install a prepayment meter. If given permission to install the meter then, by law, they can charge for the cost of putting it in. Some suppliers don't charge anything but others can charge as much as £900 when the court costs are included.
The New OFGEM Proposal
OFGEM have suggested that customers who've had a repayment meter forced upon them, should only pay between £100 and £150. The most vulnerable customers, many of whom this applies to, should not pay anything.
Gillian Guy, the chief executive of Citizens Advice said of the announcement
"Capping the warrant charges and ending them altogether for vulnerable customers will help to stop people being pushed further into debt when they are already struggling to manage their costs"
Rachel Fletcher, OFGEM's senior partner for consumers and competition comments:
"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."
You should be aware that if you're in debt with your current supplier then you can still switch energy suppliers, as long as the debt in less than £500. To find out more about your options call one of our advisers on: 01259 220000. You can also arrange a switch online. Energylinx offer a free and impartial comparison and switching service.
Posted on September 14, 2016 at 02:55 PM