Europe

Energy firms say ban of prepayment meters may be ‘recouped’ from bills

Martin Lewis gives advice on how to save £300 with British Gas

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Business Secretary Grant Shapps had pledged to crack down on “trigger-happy” companies “mistreating” vulnerable customers. Mr Grant has said he would be ordering the UK’s largest gas and electric companies to stop the “harmful and anxiety-inducing practice” of forcing households onto prepayment meters without first taking “every step” to help them with their energy payments.

He said: “Suppliers are clearly jumping the gun and moving at risk customers onto prepayment meters before offering them the support they are entitled to – I simply cannot believe that every possible alternative has been exhausted in all these cases.

“I am deeply concerned to see reports of customers being switched to prepayment meters against their will, with some disconnections of supply – and quite literally left in the dark.

“Rather than immediately reaching for a new way to extract money out of customers, I want suppliers to stop this practice and lend a more sympathetic ear, offering the kind of forbearance and support that a vulnerable customer struggling to pay should be able to expect.”

However, energy companies have said stopping them from installing prepayment metres will cause a “significant” build-up in debt, which they may need to recoup by raising the price cap on the bill for all customers.

The i has reported that energy companies have also said they are helping to support their customers by putting money into financial assistance services, offering payment holidays, restructured payment plans as well as emergency credit.

Emma Pinchbeck, the chief executive of Energy UK, has said energy companies are already required to have carried out vulnerability checks as well as “exhausted all other options” before installing pre-payment metres with a warrant.

Energy UK is a trade association for the British energy industry with over 100 in its membership, which includes companies, such as Scottish Power, Centrica and EDF energy.

Ms Pinchbeck said: “Suppliers also have a duty to manage debt and to try and prevent customers falling further into arrears.

“If the option to install a prepayment meter – after exhausting other options – is removed, then it needs to be acknowledged that this will lead to a significant increase in bad debt, which has already been rising steeply in recent months, and is ultimately recouped from customer bills.”

She added: “The increase in energy bills over the past year, and the wider cost of living crisis means there are more customers needing more help than ever before, and despite the Government-backed support schemes, the fundamental problem is that millions of people are still struggling to afford their bills.”

The chief executive also noted that: “Any measures – and their consequences – must be properly and honestly assessed to make sure that they will genuinely protect the interests of customers, especially in the context of the cost of living crisis.”

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Earlier this month, the Guardian reported that 3.2 million people have been left without power or heating last year after running out of prepay credit, according to data from citizen advice.

However, 12 of the UK’s largest energy companies have said they will be doing more to identify vulnerable costumes, and British Gas has recently announced they will be providing £10million of extra support for customers with pre-payment metres.

Chris O’Shea, the chief executive of British Gas, has said the company will be adding extra vulnerability checks and stop remote switching smart metres onto prepayment mode.

He said: “We know that some prepayment customers are self-disconnecting and not coming forward for help, so we have reviewed our policies to do more to target support at this group.”

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