Energy providers are facing mounting pressure to compensate families who have been forced to pay their energy bills through prepayment meters. In response to recent revelations that British Gas had installed these devices in vulnerable customers’ homes, all of Britain’s energy providers have now decided to halt the controversial practice. Prepayment meters, which charge higher rates than direct debits, can even disconnect households’ energy supply if they are unable to top up.
In light of the situation, Lord Justice Edis has ordered magistrates courts to stop approving court orders for the forced installation of prepayment meters. British Gas has suspended all warrant activity, and other major providers such as EDF and Scottish Power have followed suit. Energy Secretary Grant Shapps has now requested that the industry provide plans for compensating affected customers.
Mr. Shapps has asked suppliers to outline their support measures for customers, how many warrants they have sought, and their plans for rectifying any wrongdoing. He has also criticized Ofgem for failing to identify and address providers’ unacceptable behavior and has demanded that the regulator tighten its oversight and enforcement of these companies.
Expressing his frustration, Mr. Shapps said, “I am angered by the fact that some energy providers have haphazardly switched vulnerable customers to prepayment meters without any proper plan for remedial action in case of a breach of the rules.” He further noted that the providers have not done enough to offer redress to those who have been treated poorly.
Mr. Shapps called on magistrates to enhance their scrutiny of the warrant applications submitted by suppliers. According to figures obtained from the HM Courts & Tribunals service, approximately 311,000 warrants were granted to providers between June 2017 and May 2021. British Gas alone accounted for around 190,000 of these warrants, which is more than three times the industry average, as per Telegraph analysis. Ofgem is currently conducting an investigation into these recent revelations, while British Gas claims that prepayment meters are only fitted as a last resort for customers who consistently fail to pay their bills.
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