Energy firms can fit prepayment meters by force again
Energy prepayment meters must only be installed in customers' homes where it's safe and practical, and certain groups must now be excluded, according to a new code of practice announced this morning.
Companies can restart forcing customers to prepay if they're in debt, after the practice was banned for several months by energy regulator Ofgem.
Before they can do so, companies must prove to Ofgem that they have checked whether they broke any of its previous rules over the past 12 months. If they did, companies must have offered compensation to affected customers and allowed them to pay another way.
Ofgem's its new code states that those with certain long-term health conditions or aged over 85 must not have prepayment meters installed if they do not want them.
It comes after Ofgem investigated reports of energy suppliers force-fitting prepayment meters in the homes of the most vulnerable, even breaking in on some occasions. All energy suppliers have signed up to the code.
Prepayment means that you have to top-up your meters before you can use gas and electricity.
Energy suppliers must fit smart prepayment meters where they can.
Find out more: is a prepayment meter right for you?
Can my energy supplier force me to have a prepayment meter?
It depends whether you are in one of the groups exempt from having a PAYG meter force-fitted. This covers those who need a continuous supply of energy and includes you if:
- you are aged over 85 (and have no support at home)
- you have a chronic or terminal health condition (including cancer, heart or lung disease, or organ failure)
- you need a continuous supply of energy for medical reasons (for example you use powered medical equipment; are on medication which must be refrigerated; depend on carelines or a health alarm; live with emphysema, chronic bronchitis or sickle cell disease).
Suppliers must also consider whether a prepayment meter is appropriate if you are aged over 75, have children under five, have a serious medical condition or mental health condition, or are struggling with a temporary physical or mental health issue (such as pregnancy or a recent bereavement). These should be considered on a case by case basis.
If you are likely to be left without gas or electricity frequently or for long periods because you cannot afford to top up a prepayment meter, and this will cause you significant harm, then your supplier should not move you to prepayment according to the code.
These new rules cover the installation of a physical prepayment meter and changing your smart meter to prepay mode.
Forcing you to prepay because you're struggling to pay your energy bills should be 'a last resort', Ofgem says.
Read more: what is a smart meter?
When would an energy supplier make me have a prepayment meter?
If you're in debt to your gas and electricity supplier, it must contact you at least 10 times using different ways of getting in touch (where possible).
Your energy firm must try to understand your situation and offer support for three months before forcing you to PAYG.
You should not be forced to prepay if you have owed money for less than three months, owe less than £200 per fuel, or have agreed a repayment plan.
Your energy supplier must also carry out a 'site welfare visit' where it assesses the suitability of prepayment for your household before it installs one.
These rules are part of a voluntary code. All energy suppliers have signed up to it but it's not legally binding.
New rules if you already have a prepayment energy meter
If you have a prepayment meter installed, or have your smart meter switched to prepay mode, for debt collection, your supplier should give you £30 credit per meter.
Once you have repaid what you owe, your energy supplier must contact you to check whether prepayment is still the best method of payment for you. You can request to change your payment method.
Energy firms must also keep an eye on whether you're able to top-up regularly.
Ofgem has also told energy firms to identify customers who were moved to prepayment inappropriately and return them to their previous tariff. If this happens to you, you should also be offered compensation.
See the different types of energy tariff.
Should I get a prepayment meter?
Prepayment, or pay-as-you-go can help you manage your budget and avoid getting into debt. It costs more to pay this way but that is set to change from 1 July 2023 when suppliers won't be allowed to charge prepayment customers more than those who pay by direct debit.
But they're not right for everyone. You have to pay more at times of year when you're using more energy - typically in winter - whereas paying by direct debit spreads the cost equally across the year.
Suppliers must fit smart prepayment meters when they install them under warrant.
Smart prepayment means you can top up via an app or your energy firm's website. You'll also be able to see how much energy you're using and how much it's costing in near real-time.
Smart meters can be switched to credit mode (where you pay by direct debit or when you get a bill) remotely. So you won't need a new meter if you want to change how you pay.
Ofgem says it will monitor suppliers' compliance with the code and consult on whether to make it legally binding before next winter.
