Jan 22, 2023
UK Tells Energy Suppliers to End Mistreatment of Poor Consumers
The UK urged energy suppliers to stop forcing financially vulnerable consumers to install prepayment meters, saying such meters should be used only as a last resort.
“A large number of customers are in effect being forced to pay for their energy in advance,” said Jonathan Brearley, chief executive of regulator Ofgem, in an interview on BBC radio on Monday. “We want to make sure that all the checks and balances are in place to ensure no vulnerable customer is switched onto a prepayment meter.”
Brearley’s comments come little more than a week after a report by public-service organization Citizens Advice showed that gas suppliers forced about 600,000 people to ditch credit meters last year because they were struggling to pay their bills. Many of them didn’t want to stop their existing quarterly system of direct-debit invoicing but were obliged by court orders to do so.
About 4 million households across the country use a meter that requires residents to pay in advance. But moving onto a prepayment system can deepen a consumer’s financial problems because electricity tends to cost more as the best deals tend not to be made available. Partly as a result, more than 3 million people were disconnected at some point last year, according to Citizens Advice.
“Suppliers are clearly jumping the gun and moving at risk customers onto prepayment meters before offering them the support they are entitled to,” Grant Shapps, the Business and Energy Secretary, said in a statement Sunday. “I simply cannot believe that every possible alternative has been exhausted in all these cases.”
With inflation at a 40-year high and wage growth lagging far behind, Britons are struggling to make ends meet particularly as electricity prices are in some cases triple what they were a year earlier.
(Updates with comment from regulator in second paragraph.)
©2023 Bloomberg L.P.