ADAMSON WELCOMES PREPAYMENT METER COMPENSATION BUT CALLS FOR FURTHER ACTION ON UNFAIR PRACTICES
- clareadamsonmsp
- May 28
- 5 min read
SNP MSP Clare Adamson has welcomed Ofgem’s announcement of £18.6million of customer compensation and debt write offs following a review of prepayment meter (PPM) practices.
Ms Adamson, MSP for Motherwell and Wishaw, has been a long-time campaigner against unfair billing practices by energy companies and had called out the forced installation of prepayment meters.
Ofgem’s Market Compliance Review (MCR) required suppliers to examine their practices of involuntary PPM installation, including both meters that were installed under warrant and smart meters that were remotely switched to prepayment mode.
At least 40,000 customers are expected to benefit from the new measures following a review carried out by the energy regulator. But Ms Adamson has said that further action is needed to put an end to a range of unfair energy billing practices.
She said:
“I am glad to see some compensation for forced installations. I repeatedly raised cases from Motherwell and Wishaw constituents with Ofgem and energy companies.
“Some companies dismissed the practice, and others said it was only used as a last resort. But my team and I have helped many people facing a range of unfair billing practices including forced installations.
“Ofgem’s review has shown that multiple companies fell short of their obligations, and it was people in Motherwell and Wishaw, and struggling households across the country, that were at the sharp end of those failures.
“We still need to see further and faster regulatory action. My constituents face a raft of unfair energy practices: historical energy debt; so-called ‘self-disconnection’; errors in debt calculation; and the unjust standing charge.
“Even the availability of the cheapest tariffs is often down to payment method and postcode. This disproportionately impacts the people on low incomes and drives fuel poverty.
“We need stronger regulatory enforcement across the energy sector so that my constituents, and people across Scotland, are not penalised by unfair practices.
“While there is good exploratory work in Scotland on a long-overdue social tariff, energy policy is reserved to Westminster.
“I welcome Ofgem’s review, and today’s announcement, but it is a small part of the system. The UK energy market is rife with inequity and Labour inaction on these longstanding problems is costing people in every community.”
Customers identified as having had a prepayment meter wrongly installed or where processes were not followed adequately between 1 January 2022 and 31 January 2023 will be contacted by their suppliers, and do not need to take action.
For free, practical advice and information on energy-related matters you should visit the Energyadvice.scot website or call 0808 196 8660.
The Motherwell and Wishaw Citizens Advice Bureau can assist with a range of issues advice by phoning 0808 196 9180, emailing Bureau@MotherwellCAB.casonline.org.uk, or by visiting the office at 90 Brandon Parade East, Motherwell ML1 1LY.
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Background
Eight energy suppliers have committed to compensation and debt write off for at least 40,000 consumers who had an involuntary prepayment meter installed for issues including poor data quality and record keeping and unfair treatment of customers.
More than 150,000 cases were covered by one of the most comprehensive compliance reviews undertaken by the regulator.
Suppliers have already provided around £55million of financial support in the form of hardship payments and debt write off to customers covered by the review.
This update marks the closure of the Market Compliance Review for the eight suppliers involved, while enforcement investigations into British Gas, Utilita and Ovo are continuing.
Ofgem’s Market Compliance Review (MCR) required suppliers to examine their practices of involuntary PPM installation, including both meters that were installed under warrant and smart meters that were remotely switched to prepayment mode. The regulator also thoroughly examined the warrant process and customer journey when an involuntary PPM is installed, and worked with consumer groups and charities to analyse evidence of the most serious breaches.
The review identified limited cases where a PPM was fitted under warrant when it was not safe or reasonably practicable to do so. It is estimated that this occurred in fewer than 1% of cases.
The PPM MCR is part of a series of measures from Ofgem to drive up the standards of service in the energy sector, and support for households struggling with the cost of energy. As part of this work, the regulator is currently reviewing responses to a consultation on plans to tackle the growing impacts of rising debt in the energy system, and create lasting change in the way debt is managed and customers in debt are supported. The plans could see a fund called the Debt Relief Support Scheme established, which suppliers would use to either write off debt or help pay off debt by ‘debt matching’ customer payments.
Customers identified as having had a PPM wrongly installed or where processes were not followed adequately between 1 January 2022 and 31 January 2023 will be contacted by their suppliers, and do not need to take action. Ovo has also confirmed it will pay compensation to customers in line with the guidelines developed by Ofgem.
At the same time, Ofgem has strengthened the rules the rules around PPM installations and increased clarity on the steps a supplier must take before considering installation, including cases where a PPM should not be installed without the customer’s consent, and cases where suppliers need to take extra steps. 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.
The compensation guidelines developed by the regulator take into account the issues identified in the market compliance review, and reflect the potential impact the behaviour may have had on customers.
Detriment | Compensation level |
Process misalignment, data quality and record keeping | Goodwill payments of £40-60 will be paid by suppliers on a case by case basis. |
Insufficient debt support | £250 |
Unfair customer treatment | £250 |
Vulnerability not considered | £500 |
Inappropriate installation, switch or use of PPM | £1,000 |
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