Ofgem has announced a £150 cap on charges for installing pre-payment meters under warrant for customers who have racked up unpaid bills - and has banned all charges for the most vulnerable.
Under current rules, energy suppliers can apply to the court to install a meter under warrant when customers are consistently unable to pay outstanding gas or electricity bills - and charge the cost to the householder. These charges, which can include court costs, are on average £400 for a dual fuel customer but can range up to £900 - and risk pushing vulnerable customers further into debt.
As well as the cap, these measures prohibit suppliers levying any prepayment meter warrant charges and banning these installations entirely, for the most vulnerable customers. This includes prohibiting charges for people in severe financial difficulty, and banning installations entirely for people for whom the experience would be severely traumatic, such as those suffering with mental health issues.
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 their 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 pre-payment meter is a last resort. They must step in early to help customers manage debt through repayment plans.”
Craig Salter, from Citizens Advice Scotland’s Consumer Futures Unit, said: “These charges make it harder for customers who are already struggling to manage their debts.
“So, while this announcement is certainly a step in the right direction, we would also want to stress that imposing these kind of charges at all should always be a last resort, and energy companies should seek to help make sure consumers don’t fall into arrears in the first place.”
Lawrence Slade, chief executive of industry body Energy UK, said: “Installing a prepayment meter under warrant is a last resort for suppliers and only done after exhausting other efforts to contact the customer.”