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Too many people are on pay-as-you-go energy meters that risk them being cut off paying more, Ofgem, charities and the government have said.
The regulator has said it will take legal action against any supplier that forces customers onto a prepayment meter and the government is issuing firms with a “cease and desist” order.
It comes as courts are overwhelmed with warrant requests from suppliers – despite rules in place to stop forced switches.
How do prepayment meters work?
Prepayment meters are pay-as-you go gas and electricity meters. They can be topped up online or with a card at certain shops and post offices.
About four million UK households have them.
They are mostly used by people who are struggling financially – as they allow you to pay for small amounts at a time.
But this means that when the money runs out, your electricity and heating switch off. Three million people ran out of credit on their prepaid meter last year, according to Citizens Advice.
When someone is unable to pay their energy bills and has fallen behind on them significantly, energy providers seek to switch them onto a prepaid meter – so they stop getting access to energy they haven’t paid for.
According to Ofgem, this is being done by several firms without customers’ knowledge.
What are the risks?
The households on prepayment meters in the UK largely fall into these groups:
- People living in social housing
- People who have moved into a property where the previous tenants had issues with their bills
- People who have had issues with credit or their bills themselves
“People on prepayment meters are usually people who are financially vulnerable,” Erik Porter, head of financial wellbeing at Wagestream, tells Sky News.
Prepayment meters are charged at different rates to pay-monthly tariffs – and traditionally have been far more expensive.
This is still the case in some circumstances, but the energy crisis has changed things.
“With the increase in energy prices and the government’s energy…
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