UK customers to receive up to £1,000 each for forced prepayment meter fitting
Eligible energy customers across the UK will receive up to £1,000 in compensation payouts for the forced fitting of prepayment meters (PPMs).
Following a review conducted by Ofgem, Energy suppliers have committed to pay £18.6million in compensation and debt write-off to at least 40,000 UK customers for falling short of standards when trying to recover debt by installing involuntary prepayment meters.
The review found that in a limited number of cases, a prepayment meter was fitted under warrant when it wasn’t safe or reasonably practicable to do so. A number of customers were also affected when their supplier’s process fell short of standards, the review found, which includes poor support caused by issues with data quality and inadequate record keeping.
Suppliers will pay £5.6million in compensation to 40,000 customer that had an involuntary PPM installed during the assessment period. They will also write off a further £13 million of debt from customers who had an involuntary PPM during the assessment period.
Energy customers will be compensated based on the impact of the suppliers’ behaviour, with payouts ranging from smaller “goodwill payments” of £40-£60 to £1,000 for “inappropriate installation”.
The compensation guidelines published by Ofgem are shown below:
| Detriment | Compensation |
|---|---|
| Process misalignment, data quality and record keeping | Goodwill payments of £40-£60 will be paid by suppliers on a case-by-case basis. |
| Insufficient debt support | £250 |
| Unfair customer treatment | £250 |
| Vulnerability not considered | £500 |
| Inappropriate installation, switch or use of PPM | £1,000 |
“This has been one of the most detailed reviews of supplier practices in Ofgem’s history looking at tens of thousands of cases. It has taken time, but our priority has been to put things right for those who weren’t treated properly, and ensure we don’t see bad practice repeated,” said Ofgem Director General for Markets Tim Jarvis.
“We have made our expectations clear to suppliers on how those customers who were treated poorly should be compensated. They have, and continue to, work closely and collaboratively with us to make sure their processes are robust and that their customers are properly supported.”
Also commenting on the review published by Ofgem, Energy UK chief executive Dhara Vyas said that since the period examined, suppliers have adopted a new Code of Practice that strengthens safeguards for customers.
“Suppliers have worked hard to co-operate with this comprehensive review and taken further action to put things right in the cases where a prepayment meter (PPM) shouldn’t have been installed – or where there was insufficient support for the customers concerned,” Vyas said.
“Involuntary installations have been a last – but necessary – resort for cases where repeated attempts to address debt with the customer through other means have been unsuccessful. It’s bad for customers to fall further and further into arrears, and bad debt ultimately drives up the prices that are paid by all customers.”
“Since the pause on installations, customer debt has risen to a record £4 billion, and the industry remains keen to work with Ofgem on the proposed relief scheme to tackle this problem,” Vyas said.
