Energy UK has today hailed a new Code of Practice that all British energy suppliers and Ofgem have agreed upon. The Code of Practice lays out specific criteria that will further safeguard vulnerable customers when prepayment meters are installed without their will.
In order to examine their own procedures, all suppliers voluntarily suspended prepayment meters installations done under warrant earlier this year. Since that time, the energy sector and Ofgem have collaborated extensively to produce this Code of Practice and the regulator’s own evaluation.
Bad debt, or unpaid arrears, is ultimately recovered from all customer bills, disproportionately affecting low-income households. According to data from Ofgem, the debt, which in January 2023 was standing at £2.5 billion, has increased significantly over the last year.
While many customers view prepayment meters as a helpful tool for controlling their own energy use and costs, suppliers also have a duty to try to keep customers from getting further behind on their payments to limit the accumulation of individual debt and additional costs for others.
In order to achieve this, it is essential to switch some customers to prepayment meters on an involuntary basis. However, this must only be done in cases where it is safe and practical for households and when all other options, such as numerous attempts to offer support and discuss repayment options with the customer, have failed.
The new Code clarifies and standardizes the procedures and evaluations that must be done by all suppliers before, during, and after any forced changeover to prepayment meters, particularly in terms of determining when a particular installation might not be secure for vulnerable clients.
Suppliers will now need to be able to show they have procedures in place to ensure adherence to the Code before beginning any involuntary installations. They will also need to give a strategy to Ofgem on how to make amends for clients who may have had prepayment meters put improperly.
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