Tuesday, 11 May 2021

Ofgem confirms £150 cap for prepayment meter charges

Ofgem

LONDON: Ofgem has announced a £150 cap on charges for installing prepayment meters under warrant for customers in debt.

When customers fall into debt, suppliers attempt to collect payments over several weeks, which could include by email, letters, telephone and house visits. If they don’t receive payments or arrange a plan with customers, they can apply to install a prepayment meter under warrant to help recover the debt.

To get a warrant, the supplier must apply to the local magistrate, following which they will visit the property and fit a prepayment meter with the help of engineers, locksmiths and dog handlers as required.

Under current rules, suppliers can charge warrant costs back to affected customers, including court costs, which can total around £400 for a dual fuel customer on average but can go up to £900.

Ofgem, however, says this should be a last resort before they consider disconnecting the customer.

The new measures, which will take effect from January 2018, prohibit suppliers levying any prepayment warrant charges and banning them entirely for the most vulnerable people.

That includes those in severe financial difficulty and for whom the experience would be “severely traumatic” due to mental health issues.

The news follows the regulator’s introduction of a safeguard tariff to protect customers on prepayment meters overpaying for energy in April this year.

Last month, it also said it would extend this safeguard tariff to one million vulnerable customers and plans to extend it to a further two million customers next winter.

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