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Major energy suppliers hand out £1,000s in compensation and write off debts after energy meter fails
Customers will get from £40 to £1,000 based on how they were treated - see more details below
THOUSANDS of pre-payment meter customers will get compensation and debts written off after an investigation.
Energy firms are set to pay out more than £70million, Ofgem said.
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It comes after a Times investigation revealed British Gas had sent Arvato debt collection agents to "break into" people's homes and "force-fit" prepayment meters (PPMs).
It prompted the regulator to investigate and it found energy firms were switching people who struggled to pay their electricity bills onto prepayment methods.
The regulator confirmed that 40,000 customers will get compensation and debt-write offs for having involuntary meters installed and unfair treatment.
Customers will get between £40 and £60 for failures, rising to £250 if they were not given proper debt support or unfair treatments.
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Further payments of £500 will be paid if a vulnerability wasn't considered and £1,000 if they were forced to switch.
Tim Jarvis, from Ofgem, said: “This has been one of the most detailed reviews of supplier practices in Ofgem’s history looking at tens of thousands of cases.
"It has taken time, but our priority has been to put things right for those who weren’t treated properly, and ensure we don’t see bad practice repeated.
"While the number of cases where a prepayment meter was wrongfully installed is relatively low compared to the total number of PPM customers, one case is one too many. "
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Suppliers can fit these meters as a last resort to collect debt from customers who are behind on their bills.
But a new code of practice governing the installation of prepayment meters, which all energy companies signed up was put in place after the investigation.
Firms were also barred from forcibly fitting PPMs until Ofgem signs off that they are compliant with the legal changes.
Since then, some energy firms have been allowed to begin force-fitting meters again after agreeing to comply with new rules.
For all installations, suppliers must now make at least 10 attempts to contact a customer and carry out a welfare visit before a PPM is installed.
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Ofgem announced a Market Compliance Review (MCR) into involuntary prepayment meter practices at the start of 2024.
A total of eight suppliers will now pay out a further £18.6million in compensation.
These include:
- Scottish Power
- EDF
- E.ON
- Octopus
- Utility Warehouse
- Good Energy
- Tru Energy
- Ecotricity
This is on top of £55million that has been allocated in support.
Some customers have already received compensation or have had some debt written off, but may be due more,
While other customers will be receiving payments or debt write off for the first time.
Meanwhile, a further £5.6million would be paid in compensation to 40,000 customers impacted by the scandal and £13million will go towards writing off debts.
Investigations are continuing to take place for British Gas, Utilita, and Ovo.
Last year, energy suppliers paid out compensation totalling £342,450 to customers.
Dame Clare Moriarty, chief executive of Citizens Advice, said what happened "must never be repeated".
"We know the rules weren’t always followed by some energy suppliers, and that loopholes were exploited.
She added: "While it’s right that those rules have been tightened, it’s also vital that consumers get compensation for the distress that was caused.
Meanwhile, Energy Secretary Ed Miliband said that justice was "finally being delivered."
He said: "Consumers must come first, which is why we are reforming the energy market to stamp out bad practice and make it easier to access proper redress when things go wrong, through our comprehensive review of Ofgem."
How you can claim compensation
Ofgem says if a customer thinks their supplier installed a prepayment meter or switched their smart meter to prepayment meter mode when they should not have, they may be entitled to compensation.
The group also said that customers do not need to take any action, and will be contacted directly.
However, customers who fear that they have been made a victim can contact their energy firm, explain their circumstances, and make a complaint.
If you're looking to make a complaint there are organisations who can help.
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Consumers can contact Citizens Advice and Advice Direct Scotland.
If customers need extra support, the complaint may be referred to Extra Help Unit and Energy Ombudsman.
How to save on your energy bills
SWITCHING energy providers can sound like a hassle - but fortunately it's pretty straight forward to change supplier - and save lots of cash.
Shop around - If you're on an SVT deal you are likely throwing away up to £250 a year. Use a comparion site such as MoneySuperMarket.com, uSwitch or EnergyHelpline.com to see what deals are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount usually for 12 months.
Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information - which you can find on your bill - to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you payAn up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.