Ofgem warns energy companies of legal probe over customers forced onto pre-payment meters

Neil Connery reports as the energy watchdog warns companies it'll take legal action if consumers are unfairly moved onto pre-payment meters - sometimes without them even knowing about it

Ofgem has announced plans to investigate energy companies after a 'sharp' spike in the number of households struggling to pay their bills being switched to pre-payment meters.

The energy regulator has stated it will take "legal action" against companies who have not taken due care over the switching process.

It comes after Business Secretary Grant Shapps called on suppliers to halt the practice or face being "named and shamed".

Reading on a domestic household gas meter. Credit: PA

In a blog published Monday unveiling the plans, Ofgem's chief executive, Jonathan Brearley, said he is concerned about the “sharp growth in households struggling to pay their bills being switched over to pre-payment meters, sometimes without their even knowing about it, leaving them without heating”.

Mr Brearley said a review by the regulator last year of firms’ processes for dealing with the most vulnerable customers resulted in legal orders to improve and one company agreed to pay into Ofgem’s compensation fund, but he said the Business Secretary and Citizens Advice are “right to remain concerned”.

Mr Brearley wrote: “The numbers of forced installation of pre-payment meters is extremely high. It is simply not acceptable that vulnerable customers are left in the dark and cold in winter.

“Therefore, today, we will take forward a further, more detailed assessment to check whether plans have led to improvements.

“This review will focus specifically on self-disconnections, remote switching and forced installations, and the checks and balances companies have around any decision to put a customer on a pre-payment meter.

“If we find that they have not taken due care in this process, we will take further legal action against them.”

Grant Shapps has demanded that energy suppliers stop forcing financially stretched households to switch to pre-payment meters. Credit: PA

On Sunday, Mr Shapps said energy firms should first make greater efforts to help those struggling to pay their bills, such as offering credit or debt advice.

He also asked suppliers to reveal the number of warrant applications they have made to forcibly enter properties to install meters.

Ministers have been urged to impose a moratorium on the forced fitting of prepayment meters, with Labour promising to take the measure.

But the Government is resisting such a ban due to concerns over a subsequent increase in bailiff action.

It comes after hundreds of thousands of customers have been switched over to more costly prepayment meters, often unwillingly and without the offer of support, after failing to keep up with rising energy payments.

Some have found their smart meters switched to prepayment mode remotely while others have been confronted at their door by teams sent by energy companies – armed with magistrates’ court warrants – to physically make the change.

Campaigners say those switched often then go without power as they cannot afford to keep the meter topped up – something that is referred to as “self-disconnection”.

It comes after energy bills have soared due to rampant inflation and the impact of Russia’s invasion of Ukraine.

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