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Forced prepayment meter switching: a broken system?

a white radiator mounted on a wall
Paul Walmsley

Energy Relationship Manager

Forced prepayment meter switching leaves people confused and in the dark. 

In early December, my family and I moved house. As pretty much anyone will tell you, a house move can be one of the most stressful times the average family will go through. Things aren’t where they are meant to be. Familiar routines go out of the window. Unexpected issues crop up.

We ended up having a pretty torrid time. Things started to go wrong almost immediately: our dryer blew up after a few days. The gas cooker suddenly wouldn’t light. Most significantly, our gas and electric company deactivated the payment cards to our new prepayment meters – meaning we spent almost a full night and day without gas in December. And then our electricity started to run out as well.

I remember feeling incredibly frustrated – we had done everything the supplier had said, so why wasn’t it working? The repetitive beep of the In-Home Display Unit would sound to indicate that we were running out of credit, but there wasn’t anything I could do to stop it. I am heartbroken even now to remember my autistic son running around the house turning off every light and plug because he was worried we were using too much electricity.

When things go wrong, it’s stressful. But when things go wrong for those in vulnerable circumstances, there is a multiplication factor; there are more things to juggle than the problem that caused it. I’m often referred to as the energy guy’ around CAP because I’m the knowledge expert of all things energy sector – but even being knowledgeable about the problem doesn’t mean I have a solution. I need the tools to be able to make things work properly again. So what does that mean for those who aren’t surrounded by energy sector terminology or the latest updates on support available?

How are energy suppliers forcibly switching people to prepayment meters?

It has been a hot topic in the sector and in the national news recently that 600,000 people had their gas and electric meters forcibly switched from credit to prepayment in 2022. In the last few days, concerning footage has emerged of the activities of a debt collection agent working on behalf of British Gas. This is particularly significant for those who have smart meters, where the supplier can remotely mode switch’ the type of supply without even visiting the home. Sadly, this isn’t even a new thing – I remember asking questions of a supplier about this at least two years ago: what are the rules that suppliers have to follow when it comes to smart meters? I didn’t receive an answer then. I didn’t receive an answer last week when I posed the same question to Ofgem directly. And now suddenly they’re stopping suppliers from doing it, because of this new evidence in the public arena.

What is the impact of forcibly switching people to prepayment meters?

For many, the practice of remotely switching prepayment meters has led to people in vulnerable circumstances being left confused and, in many cases, completely cut off. All the evidence and the real life stories heard from across the consumer spectrum suggest that there is something inherently broken with the way this practice has been carried out. My own experience of being temporarily off-supply with no way to get help has shown me just how scary that situation can be. There are families out there that CAP supports who have been suffering every day.

What is being done about forcibly switching people to prepayment meters?

In response, Ofgem have announced that they are reminding suppliers of their obligations’ as well as launching a market review of supplier practice and standards. And now, in the face of overwhelming pressure from the Government and from the general public, they are only just taking the step of carrying out action to stop the practice of warrant-led prepayment meter installations. As I put it to someone recently: they’re trying to close the barn door when the horse has already made it to the next town over.

We know of at least two major suppliers that have voluntarily taken steps to hold switching customers to repayment meters due to non-payment. However, we are forced to ask: why is it that this was not only a voluntary act by suppliers, but also why more suppliers aren’t following suit? If there is a general recognition that customers are in severe hardship, especially during the winter, then why aren’t more taking this action without regulatory pressure? Indeed, it appears that British Gas only froze their warrants process in response to rather shocking footage in the press of those warrants being carried out. And now Ofgem has taken action, there is no longer the opportunity for any supplier to claim they did the right thing.

The answer to this question is likely to be complex; there are certainly financial risk factors post-pandemic, and we have seen suppliers exit the market because of this. Yet, at a time when there is widespread acknowledgement that households are feeling significant financial squeezes, the sad truth is that in preventing their own debt book increasing, there are decision-makers at suppliers who are permitting families to endure more hardship rather than bring them a solution. As I have heard it described: debt is more easily resolved than death.

At the end of the day, we appear to be once again in a space reminiscent of this Spiderman meme: Suppliers, Ofgem, and the Government all standing and pointing at one another as if to say it’s your responsibility’. At some point, one of these parties will need to take it.

Can I switch from prepayment to direct debit?

Where someone doesn’t have any arrears on their meter, it is still possible to ask your supplier to put them back onto direct debit. We have also learned that if you inform a supplier that there is some sort of vulnerability in the household (for instance, if there is a small child in the house, or if there is someone with difficult medical issues) then they can often change the meter back onto direct debit as well. This process is often a lot faster for those with a smart meter, as the company won’t need to visit your property.

I’m struggling, where can I get help?

In the meantime, help remains available from many organisations out there that can offer support. There are widely publicised schemes designed to assist those in need during the Cost of Living Crisis, and more households need to be encouraged to take advantage of these. CAP has seen great numbers of people accessing our new online benefits calculator. Waiting for an enforcement agent to knock at your door is not the way to deal with your problems, and I would plead with anyone who is struggling at this time to get in touch with a free debt help provider such as Christians Against Poverty (CAP)

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Ruth holding a sign that reads 'There is so much need. I'm at my limit.'
Ruth, Co-Debt Centre Manager

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Ruth holding a sign that reads 'There is so much need. I'm at my limit.'