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Lucy Hooker, a business reporter, has highlighted how tens of thousands of energy customers are set to receive payouts of up to £1,000 each and could see debts written off in response to the scandal surrounding the forced fitting of prepayment meters. Energy companies are shelling out over £70m in compensation and financial support to affected customers, following a review by the regulator, Ofgem, on how suppliers switched vulnerable customers to paying upfront without their consent after falling behind on bills. Energy UK, which represents energy firms, stated that suppliers have made significant efforts to rectify the situation after Ofgem’s intervention.
Eligible customers may receive payments ranging from £40 to £1,000 depending on their treatment by the energy supplier or if processes were not adequately followed. The highest payments are for customers who experienced “inappropriate installation”, according to Ofgem. The regulator assured that affected customers who have not yet received help or been contacted by their energy supplier do not need to take any action as compensation will be directly deposited into their accounts. Tim Jarvis, Ofgem’s director general of markets, emphasized that their priority has been to correct the mistreatment of customers and prevent similar bad practices from happening in the future.
The scandal unfolded two years ago amidst a cost of living crisis, triggered by energy price spikes following Russia’s invasion of Ukraine. It was revealed that energy firms were transferring struggling bill-payers to prepayment methods either by remotely switching their smart meters or by physically installing new ones. Amidst public outcry, British Gas agents were found to have forcefully entered homes of vulnerable individuals. Ofgem acted by halting all forced installations and initiating a review from January 2022 to January 2023. The nearly £74m announced by Ofgem only applies to customers of eight specific suppliers, including Scottish Power, EDF, and E.ON, who have already provided £55m in financial aid.
Enforcement investigations are ongoing for British Gas, Utilita, and Ovo, representing additional impacted customers. A stricter code of practice is now in effect for companies seeking to install prepayment meters without customer consent. While acknowledging that forced fittings were a last resort in certain cases, Dhara Vyas, chief executive of Energy UK, emphasized the importance of addressing customer debt promptly to prevent negative repercussions on all consumers. Dame Clare Moriarty of Citizens Advice urged the energy sector to swiftly disburse compensation to those most affected, emphasizing the need for consumers to be compensated for the distress caused by the scandal
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