Tens of thousands of British households that had prepayment meters force-fitted in their properties are to share more than £18.6m in compensation and debt write-offs on their energy bills.
The energy regulator for Great Britain,Ofgem, found that energy companies forced prepayment meters on more than 150,000 homes that were not keeping up with their bills, in one of its most comprehensive compliance reviews.
The investigation found thatScottishPower, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, TruEnergy and Ecotricity had fallen short of the regulator’s standards when using this tactic to reclaim unpaid energy debts. The eight energy companies have committed to paying compensation and writing off energy debts for at least 40,000 consumers.
However, the compensation payments do not include the customers of British Gas, Utilita or Ovo Energy, which face separate investigations by the energy regulator.
Households affected by the scandal, which was first uncovered by the Times, can expect to receive payments starting at £40, rising to £250 or £500, depending on the way they were treated by their energy supplier. Payments of up to £1,000 could be paid to customers who had faced “inappropriate installation”, Ofgem said.
Energy companies were found to have forced prepay meters into the homes of customers who were known to be vulnerable, including those with mental illnesses and young children, as the energy cost crisis in 2022 caused many to miss payments on their energy bills.
The energy regulator was heavily criticised for failing to halt the forced meter installations, despite repeated warnings from campaign groups and MPs, until afterthe Times reportedin early 2023 that debt agents working for British Gas had ignored signs of vulnerability to fit the meters.
Ofgem allowed suppliers torestart forced meter installationsless than one year later, although forced fittings in homes with young children and those over the age of 75 remain banned.
Ed Miliband, the energy secretary, said: “Justice is finally being delivered to many of the families, lots of them vulnerable, who were affected by the scandal of energy suppliers wrongly forcibly installing prepayment meters.
“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.”
Sign up toBusiness Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Tim Jarvis, a director at 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.
“We have made our expectations clear to suppliers on how those customers who were treated poorly should be compensated. They have, and continue to, work closely and collaboratively with us to make sure their processes are robust and that their customers are properly supported.”