Ofgem confirms £150 cap for prepayment meter charges

Ofgem has confirmed a £150 cap for customers in debt who are forced to have prepayment meters installed. When customers fall into debt, suppliers attempt to collect payments over several weeks, which […]

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By Priyanka Shrestha

Ofgem has confirmed a £150 cap for customers in debt who are forced to have prepayment meters installed.

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.

Rachel Fletcher, Ofgem’s Senior Partner for consumers and competition said: “At the moment, vulnerable customers face a double blow when they’re hit with high warrant charges on top of existing debt – risking making situations worse. The measures will protect all consumers, including the most vulnerable, from experiencing unnecessary hardship due to having a meter installed under warrant.

“We want to send a strong message to suppliers that using a warrant to install a PPM is a last resort. They must step in early to help customers manage debt through repayment plans.”