Forced move to pre-payment meters ‘pushes people into even more unpayable debt’

People need strengthened legal protections to help stop them from being forced on to pre-payment meters, ministers have been told, amid a warning they could be pushed into unpayable debt.

Energy Action Scotland and the Poverty Alliance on Monday said they were concerned by the number of people being moved onto pre-payment meters by energy suppliers, despite guidance from regulator Ofgem that it should be a last resort.

Smart meters can be switched to pre-payment remotely, but for non-smart meters a warrant is needed to access homes to force the switch.

Energy bills can be as much as 10% more via pre-payment than when paid by direct debit, the organisations said.

They have asked the Scottish Government to work with the judiciary and review the conditions for warrants being issued to force smart meter installations.

Frazer Scott, chief executive of Energy Action Scotland, said “more could be done to set down guidance for sheriffs, about what evidence the company has to show in order to get a warrant from the court”.

“We believe sheriffs have a duty to make sure that the energy companies have done everything they can to come to an arrangement with a customer, before they issue a warrant,” he said.

“The Ofgem guidance is clear that moving customers on to pre-payment meters should be a last resort. We’re looking to the Scottish Government to help.”

Across Great Britain the number of households who have moved, or been moved, to prepayment meters in the thee months to the end of October was 60,000. This compares with 95,000 in the whole of 2020.

Peter Kelly, director of Poverty Action, said: “We know that people on pre-payment meters pay more for their energy, so switching customers could lead to them being pushed into even more unpayable debt.”

Campaigners say putting people on pre-payment meters punishes poorer and more vulnerable households for being on a lower income than others, and Scott said switching smart meters to pre-payment ones remotely amounted to a “de facto disconnection”.

“It’s obvious that these people won’t be able to afford credit for the meter, and will end up with no supply,” he said.

“At this time of rising costs and increased vulnerability to disconnection we believe that every step should be taken to protect low-income energy consumers.”

A Scottish Government spokesman said: “While the legislative powers relating to this matter sit with the UK Government, we are aware of incidents when energy suppliers have switched their customers’ accounts to prepay mode without informing them first or obtaining a warrant beforehand.

“This can have serious impacts upon consumers, particularly those living in vulnerable circumstances.

“We condemn this kind of practice as it is likely to exacerbate the challenges many people in fuel poverty are already contending with and we encourage all affected customers in need of help to contact Advice Direct Scotland.”