Installation of pre-payment meters (PPMs) represents disconnection by the backdoor, and transfer of a smart meter to a PPM setting is likely to present an underhand way of disconnecting people in fuel poverty.
If PPM customers do not have money to top-up their meter, eventually, they will run out of gas or electricity and self-disconnect. And to make matters worse, PPM users generally still pay daily standing charge costs even if they have fallen into debt and self-disconnected from their supply. This makes it increasingly difficult for them to get back on supply as they are often made to pay off accrued debt before they can access their heating and power. [1]
Disconnection leaves people at an even higher risk of the very worst effects of living in a cold damp home this winter. These include causing or worsening respiratory conditions, cardiovascular diseases, mental health, dementia and hypothermia and slower recovery from injury. [2]
So while energy firms’ licence conditions should protect many vulnerable people from formal disconnection, customers in debt who are forced onto a PPM by their supplier will often “self-disconnect.” [3]
To make matters worse, campaigners found that magistrates courts were “rubber stamping” warrants to force people onto PPMs if they were in debt to their energy firm. Freedom of information requests revealed 187,000 such applications were made by energy firms in the first six months of 2022 and 500,000 since the end of Covid lockdown. An investigation by Dean Kirby at the i Paper found some courts were approving 500 warrants in under four minutes. [4]
It has also been established that firms are inappropriately switching smart meters from credit to pre-payment mode, thereby forcibly installing PPMs remotely. [5]
While some customers do prefer to pay via pre-payment, research by an energy firm indicates that as many as 630,000 households could have been forced onto a PPM without their express consent. [6]
Ofgem recognised that this is a breach of licence conditions and have repeatedly written to energy firms urging them to stop this practice. [7]
However, the scandal continued…
- Throughout Kirby’s investigation for the i paper, energy firms assured campaigners, ministers, MPs and the media that these meters and forced transfers were not used on vulnerable customers.
- Energy UK, the industry trade body which represents firms including British Gas, Scottish Power and EDF Energy told the i paper that “suppliers face ‘difficult decisions’ in dealing with customers in debt on their bills and the warrants are a last resort after ‘exhausting all other options’ and after vulnerability checks are carried out.”
- However, The Times investigation into British Gas’ use of PPMs proved this was not the case.
- This led Ofgem to impose an energy-firm backed voluntary ban on the forced transfer of households onto PPMs and the Chief Justice to impose a ban on magistrates issuing court warrants to install PPMs.
- Despite the current ban being put in place by Ofgem and the Chief Justice, there were then reports of energy firms using the threat of a court order imposed PPM to intimidate households. And energy firms were also been granted over 13,000 warrants for entry since the voluntary ban came in, with the i paper reporting that the Ministry of Justice “does not know” why these warrants were issued.
- Energy firms then signed up to a new voluntary code of conduct, designed to govern the forced installation of prepayment meters. And Ofgem made this part of licence conditions from 1 October 2023 (despite concerns that the guidelines do not go far enough) and the cost premium associated with paying by PPM (as opposed to direct debit) was removed through the Ofgem price cap.
- In November 2023, when the new court process was being developed, End Fuel Poverty Coalition wrote [pdf] to Ministers to raise concerns that a “cloak of secrecy” appeared to have remained in place following media reports about the behaviour of one firm, the letter set out that “the same old magistrates’ practices seem to have continued.”
- Despite the concerns, Ofgem allowed energy firms to restart force fitting prepayment meters in early 2024.
Now to the present day…
Three years on from the scandal that exposed the forced installation of prepayment meters into people’s homes, a new year-long investigation by The Standard revealed that energy companies are still relying on closed magistrates’ court hearings to secure warrants against households with unpaid bills, often without customers present or represented.
This has lead campaigners to write to the Government and Ofgem demanding an immediate new pause on forced prepayment meter installations until further conditions are met.
Customers can contact Citizens Advice or other representative organisations to challenge installations.
Notes
[1] NEA, 2021. Fuel Poverty Monitor. National Energy Action. [Online]. Available at: https://www.nea.org.uk/wp-content/uploads/2021/11/0000_NEA_Fuel-Poverty-Report-and-Exec-Summary_v2.pdf. [Accessed 28/10/22]. Pg37.
[2] Full details and sources at https://www.endfuelpoverty.org.uk/about-fuel-poverty/
[3] Citizens Advice, 2022. Out of the cold? Helping people on pre-payment meters stay connected this winter. Citizens Advice. [Online]. Available at: https://www.citizensadvice.org.uk/Global/CitizensAdvice/Energy/EXTERNAL_%20For%20publication_Out%20of%20the%20cold_%20Helping%20prepayment%20customers%20to%20stay%20connected%20this%20winter.pdf. [Accessed 28/10/2022]. Pg3.
[4] Examples of “rubber stamping” such applications go back as far as 2013 at least: https://thejusticeofthepeaceblog.blogspot.com/2019/11/everyday-injustice-at-magistrates-courts.html [Accessed 25/11/2022]
187,000 figure: https://www.bigissue.com/news/social-justice/energy-companies-court-warrant-prepayment-meter-cost-of-living/ [Accessed 25/11/2022]
500,000 figure / 500, 4 minutes figure: https://inews.co.uk/news/uk-energy-debt-crisis-half-million-warrants-granted-forced-prepayment-meters-2008884 [Accessed 12/01/23]
[5] https://www.citizensadvice.org.uk/Global/CitizensAdvice/Energy/EXTERNAL_%20For%20publication_Out%20of%20the%20cold_%20Helping%20prepayment%20customers%20to%20stay%20connected%20this%20winter.pdf. [Accessed 28/10/2022]. Pg4.
https://www.bbc.com/news/business-63554879 [9/11/22]
[6] Research by Utilita, reported in The Sun, indicates that while 86% did choose to be on a PPM, as many as 14% of the 4.5m PPM households (i.e. 630,000 households) did not choose to be on the tariffs which could cost them in excess of £200 more this winter.
[7] Standard licence conditions (SLC) 27 and 28. While suppliers are mandated to check that a PPM is safe and reasonably practicable before installation, End Fuel Poverty Coalition members have heard reports of older and vulnerable people being forced onto a PPM or having their smart meter switched to PPM mode without due regard to their safety. Letters from Ofgem, e.g. November 2022 and September 2022.