Citizens Advice Scotland (CAS) have said that allowing energy suppliers to resume installations of forced prepayment meters (PPMs) is a “significant worry“.
Confirmed by energy regulator Ofgem, some suppliers can resume using mandatory PPMs for certain customers who may have debt after providing evidence that they have met regulator’s conditions.
Data from CAS suggests more than 360,000 people in Scotland are worried about money owed to their energy supplier, with Ofgem urging customers to reach out to their supplier if they believe they will struggle to pay bills.
The charity said the number of people seeking energy debt advice from the CAB network rose by 34% from 2021/22 to 2022/23 and that on average the energy debt for those seeking advice is more than £2,300.
Often known as ‘pay as you go’ meters, suppliers such as EDF, Octopus and Scottish Power have been given permission to restart involuntary PPM installations.
The installations were suspended in February last year following an investigation, with Ofgem setting out new guidelines with suppliers previously being able to forcibly install the meters when bills went unpaid.
CAS social justice spokesperson Emma Jackson said: “Suppliers being given the green light for forced installations will add to significant worry people who are behind on their bills and in fuel debt already have.
“Data from across the Citizens Advice network sees demand for advice in fuel debt rising, which the average debt being £2,307. People find themselves in debt because costs are too high and incomes are too low. That’s why we urgently need to see a social tariff in the energy sector.
“For some PPM customers, energy is viewed as a luxury they can only afford in the first week or two of the month, and they then go without until the next payday. Our CAB advisers see firsthand the very real toll that going without energy has on people’s physical and mental health.
“We need a permanent ban on mandatory PPMs, whether that is physically installing them in people’s homes or remote switching a smart meter.
“The current code of practice doesn’t go nearly far enough and is riddled with loopholes.
“The threshold which suppliers agree to not install meters is too high – for example households with children and many pensioners remain at risk from forced installations.
“Guidance needs to be understandable and clear so advice and advocacy bodies can achieve the right outcomes for consumers and suppliers understand their requirements.
“We have provided information to Ofgem to outline a number of concerns where more clarity is needed – it also means we can’t properly flag compliance concerns if we don’t understand the requirements.”
Ofgem’s rules ask suppliers not to force the installations on households with a child under two, or where all occupants are over 75.
Tim Jarvis, director general for markets at Ofgem has warned suppliers that the installation of the meters must be after all options for the customer are exhausted and that the regulator’s rules must be followed.
He said: “Protecting consumers is our number one priority. We’ve made clear that suppliers must exhaust all other options before considering forced installation of a prepayment meter, and consumers can help themselves by reaching out to their supplier as soon as possible if they think they won’t be able to pay their bill, so payment options can be discussed. Our rules on when, and how, a prepayment meter can be installed are clear and we won’t hesitate to take action if suppliers act irresponsibly.
“While nobody wants to see the practices uncovered last year repeated, we also know that allowing households to build up unsustainable amounts of debt isn’t the right thing to do either. Many households value the control that these pay as you go meters offer over bills and how they can help with budgeting, and suppliers must also be able to recover debt to make sure those costs don’t end up on everyone else’s bills.
“We will continue to work closely with consumer groups and suppliers to make sure households understand their rights when it comes to prepayment meters, and will regularly review our rules to make sure they are working to protect the most vulnerable. I’d also strongly encourage consumers to make sure their personal details and circumstances are up to date with their supplier, so they can be taken into consideration if or when payment problems arise.”
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