Smart meter warning for energy customers who could end up paying more
THOUSANDS of households on smart meters could end up paying more for their energy bills this winter.
Around 60,000 households have already had their meters remotely switched to prepayment mode over the last three months, figures from Ofgem show.
Customers on prepayment meters end up paying higher rates for their energy use than those who pay by direct debit – roughly £258 a year more.
Energy suppliers can now switch customer smart meters over to these costlier payment methods at the click of a button.
They can do this to help recover a debt if a customer can no longer afford their bills.
Before smart meters were introduced energy suppliers would have to issue court warrants so they could enter properties and install prepayment meters.
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However, the requirement for a warrant does not apply when suppliers are switching smart meters to prepayment mode remotely.
The energy regulator Ofgem told that it has recently received reports of “vulnerable customers being left without power for days or even weeks.”
When switched on to prepayment mode, it means customers must “pay as you go” for energy use.
It’s known as self-disconnection when someone chooses not to top up.
So far this year, Citizens Advice has seen a 158% increase in people being forcibly moved to a prepayment meter on the previous year.
The charity said that in recent months almost 500 people have been in contact in distress after being forcibly moved onto prepayment meters.
We’ve explained in detail below when customers could be forced to switch to a prepayment meter.
But Ofgem does warn suppliers to use the “remote switching facility fairly and appropriately.”
Gillian Cooper, head of energy policy at Citizens Advice, said: “Forcibly moving people in debt onto prepayment meters is disconnection by the backdoor.
“If people can’t afford to top up, they’re at real risk of the heating going off and the lights going out.
“The government must ban energy suppliers from using these tactics this winter. And Ofgem has to ensure energy companies aren’t chasing people for arrears they simply can’t pay.”
An Ofgem spokesperson said: “As a robust regulator we take proactive steps to protect energy customers.
“Through our constant monitoring of suppliers and work with stakeholders, we’ve become aware of possible failings in how some suppliers treat vulnerable smart meter consumers, including some customers being switched to prepayment meters without full regard to the customer’s situation.
“In extreme cases, the reports we’ve received suggest this has led to some vulnerable customers being left without power for days or even weeks.”
In response to their findings, Ofgem wrote to all suppliers to tell them to urgently look into this issue while reminding them of the rules they must follow before switching people’s meters over.
Why are prepayment meters more expensive?
Customers are moved onto prepayment meters by energy suppliers if they can’t afford their bills.
Once they’re on one, they have to top-up their energy before using it.
But it’s usually a costlier way to pay for energy compared to if you’re on a traditional or smart energy meter.
Citizens Advice estimates that those on prepayment meters will spend £258 a year extra this winter compared to those paying by direct debit.
That’s partly because customers on prepayment meters don’t have the opportunity to overpay bills in the summer, which means they have to pay higher amounts in the colder months.
We previously reported on how millions of households on prepayment meters are paying extra and being pushed further into debt.
The charity says its advisers have already seen people resorting to unplugging fridges and freezers, washing clothes by hand and skipping meals to cut back on energy costs.
When can I be moved to a prepayment meter?
Suppliers must give consumers an active choice before remotely switching a smart meter to prepayment mode to collect a debt and check that it is appropriate for consumers to pay by this method, including for vulnerability.
And in most cases, energy firms are required to check if it is to offer a prepayment tariff, potentially through a site visit, and must notify consumers of any change in payment mode and how to top up.
It’s important to know that your supplier can’t make you move to prepayment if you are disabled in a way that makes it hard to get to, read or use the meter or have a mental health condition that makes it hard to get to, read or use the meter.
Customers with an illness that affects their breathing, such as asthma or an illness that’s made worse by the cold, such as arthritis can decline a prepayment meter.
The same goes for those that use medical equipment that needs electricity – for example a stairlift or dialysis machine.
Moving customers to a prepayment meter is generally a last resort.
If you’re struggling to pay your bills, it’s vital your speak to your energy firm straight away as there is help they can offer.
Usually, if you haven’t contacted your supplier over a debt after 28 days, it can install a prepayment meter.
What other bill help is coming?
In October, all households started to receive a £400 energy bill discount.
The payment is dished out by your energy supplier and is split across six discounts between October and March next year.
Households will receive a £66 energy bill discount in October and November and a discount worth £67 in December, January, February and March.
A £300 one-off “Pensioner Cost of Living Payment” will be paid out to eight million households this month.
It will be given to those who already get the winter fuel payment – which is worth between £100 and £300 for those over the state pension age.
Millions of households are also in line to get the £150 Warm Home Discount between December and March 2023.
What energy bill help is available?
There are plenty of energy grants and schemes open to help you out if you’re struggling.
British Gas has recently confirmed that it’ll pay its most vulnerable customers grants worth £750 to help with sky-high bills.
Ask your supplier what’s on offer and how to apply, or check here:
There’s also a one-off fuel voucher from your energy supplier if you’re on a prepayment metre.
If you’re in debt there are plenty of services you can take advantage of and they offer free and friendly advice on how to manage debt.
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Most of them can offer you free guidance and help in person, over the telephone or online.
- – 0800 138 7777
- – 0808 800 9060
- – 0800 138 1111
- – 0808 808 4000
They can also help you take the next steps if you need a debt management plan (DMP) to tackle your debt or an Individual Voluntary Arrangement (IVA). These are agreements for managing multiple debts.