Ministers have been urged to review the practice of forcibly installing energy prepayment meters in homes as the energy crisis has left some vulnerable customers without heat or electricity through the winter.
More than three million people were left without heating or power last year because they ran out of credit on their meter and hundreds of thousands of homes were moved to prepayment this winter having fallen behind on paying their bills.
In the wake of an investigation by The Times, British Gas was banned by Ofgem, the energy regulator, from force-fitting prepayment meters in people’s homes. All other major energy companies subsequently said they would also suspend the practice.
How many people have been affected?
An estimated 600,000 people were forced to switch to prepayment meters last year after falling into debt with their energy supplier, compared with 380,000 in 2021, according to Citizens Advice.
Caroline Flint, the former Labour MP who is now chair of the independent advisory body the Committee on Fuel Poverty, said: “I think energy companies have been given the benefit of the doubt on this for too long and now I think it is right to have this moratorium.”
Shadow climate secretary Ed Miliband echoed the call for a moratorium and called the installation of prepayment meters a “shameful” practice.
Why does it happen?
The forced installation of prepayment meters has long been controversial. The practice occurs after an energy company needs to recover a debt due to a default on payment.
However, the recent undercover investigation by The Times revealed that agents working for at least one company – Arvato Financial Solutions – were being incentivised with bonuses to break into people’s homes to force-fit meters under warrants.
Separate investigations by the i newspaper’s Dean Kirby have also revealed “how warrants to force fit these controversial devices were being used – from the courts approving them to the debt collecting firms acting on them”.
In response to the growing public pressure, the UK’s biggest energy companies have now been ordered to stop force-fitting meters and review their practices.
Should prepayment meters be used at all?
In an opinion piece for The New York Times, Kerry Hudson, the author of Lowborn, a memoir of growing up poor in Britain, described prepayment meters as a “monster in my home”.
“Small but cruel, it could be found under the stairs, sometimes in the kitchen. You had to feed it with coins, later with cards and keys, or be punished,” Hudson wrote. “When there wasn’t anything to feed it, everything would go dark. The TV turned off, whatever you were cooking stopped bubbling on the stove, the shower ran cold and the food in the refrigerator started to spoil. That monster could stop us from bathing, eating or sleeping. It could, and did, make us ill.”
That sentiment was also expressed by hundreds of British Gas customers who told The Times of feeling mistreated by the supplier, “including a single mother who had to light her home with candles after being forced on to a prepayment meter”, the paper said.
One customer, Lesley Fleming, 39, told the i newspaper that since her energy supplier E Gas & Electricity forced her on to a prepayment meter last September her monthly energy costs have risen from £50 per month to around £200. Since she stopped being able to pay her bills her energy supply has been cut off multiple times in the past month while she has been home alone with her one-year-old son, Archie.
What will happen next?
Chris O’Shea, chief executive of British Gas’s parent company Centrica, has been asked to provide “urgent answers” on how the company intends to ensure vulnerable people are never targeted again, The Guardian said.
Earlier O’Shea had said: “Protecting vulnerable customers is an absolute priority… The allegations around our third-party contractor Arvato are unacceptable and we immediately suspended their warrant activity.” British Gas has announced that it will stop applying for court warrants to enter customers’ homes and fit prepayment meters.
However, Jonathan Brearley, chief executive of Ofgem, said suppliers needed to “get their house in order” on prepayment meters.
Ofgem told The Times that it will be launching an “urgent investigation into British Gas” and “won’t hesitate to take firm enforcement action”.