People who had prepayment meters forcibly installed in their homes are in line for compensation of up to £1,000 after energy companies signed up to pay £18.6m in debt cancellation and customer payments.
The announcement follows energy regulator Ofgem’s review of companies forcibly entering the homes of indebted, vulnerable customers to fit prepay meters to prevent them accruing further arrears.
Thousands of people were affected and are to receive the debt write-offs and, in some cases, payments from eight providers: Scottish Power, EDF, E.ON, Utility Warehouse, Good Energy, TruEnergy and Ecotricity.
At least 40,000 customers are due to receive the awards following the completion of one of Ofgem’s “most wide-reaching reviews”, which included more than 150,000 cases where meters were forcibly and also remotely installed without the billpayers’ permission.
Energy providers will pay £5.6m in compensation for the involuntary installation and issues like poor record-keeping and data quality. These issues meant customers didn’t get the support they needed.
A further £13m of energy debt will be cancelled.
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Ofgem had already provided £55m in financial support, such as hardship payments and arrears write-offs to affected consumers.
There were only “limited” times – fewer than 1% of cases – when a prepayment meter was fitted under warrant when it wasn’t safe or reasonably practicable to do so, the review found, during the assessment period of 1 January 2022 to 31 January 2023.
Despite this, Ofgem said “one case is too many”.
Separate investigations into involuntary installations by British Gas, OVO and Utilita are still ongoing.
“This has been one of the most detailed reviews of supplier practices in Ofgem’s history,” its director general of markets Tim Jarvis said.
“Our review also found wider issues with the processes suppliers had in place, which is why we’ve put in place clearer, tougher rules to protect customers in vulnerable situations.
“We know that [prepayment meters] can be an effective tool in helping customers manage their costs and debt.
“However, customers must always be treated fairly and compassionately, and we are confident that the changes we have made are a significant step to ensure that happens.”
The forced installation practice was uncovered by The Times in February 2023. Rules around their fitting have since been enacted by Ofgem.
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Households have been struggling with high energy costs, which skyrocketed following Russia’s invasion of Ukraine.
Energy Secretary Ed Miliband said: “The government has campaigned tirelessly on this issue and are pleased to see the level of compensation increase to £18.6m, up from £420,000 under the previous government.
“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.
“This increased compensation package is a good start, and we will be announcing further reforms in the weeks ahead.”
