Pre-Payment Meters Archives - Page 2 of 2 - End Fuel Poverty Coalition

Pre-payment meters crisis hits ‘smart’ customers

The forced use of pre-payment meters (PPMs) is hitting smart meter customers, according to new data released under Freedom of Information rules. [1]

Almost two-thirds of smart meters switched to the more expensive “pre-payment” mode in the first half of 2022 were due to debt (48,062 households).

The figures, obtained by the Bureau of Investigative Journalism (TBIJ) and shared with the End Fuel Poverty Coalition, reveal that in 64.4% of cases, a smart meter was forced into a pre-payment mode as the customer was in debt to their energy firm.

Separate figures for the Warm This Winter campaign, reveal that 68% of smart pre-payment meter customers are vulnerable, with 58% having health conditions or disabilities. [2]

While the number of smart meter customers who have been “disconnected by the backdoor” is lower than for those on traditional PPMs, it is still estimated that 53% have drastically reduced their energy use in recent months and 35% now live in a cold damp home as a result. [3]

Overall, the data obtained by TBIJ also shows that 895,739 customers were in debt to their energy firm by the end of June 2022, before the winter price rises kicked in.

Pre-payment meters could cost customers in excess of £200 more for their energy this winter. Recent investigations by the media revealed that energy firms have secured almost 500,000 court warrants to install these traditional pre-payment meters in homes of customers in debt since the end of lockdown. Smart meters can be turned to pre-payment mode without a court warrant.

The End Fuel Poverty Coalition has called for a ban on the forced transfer of customers to all kinds of pre-payment meters. A spokesperson for the Coalition commented:

The new figures reveal the extent to which unscrupulous suppliers are forcing people onto more expensive tariffs by switching their smart meter remotely onto pre-payment mode.

Consumer groups and charities have long supported the roll out of smart meters as a way to help save energy and reduce bills, but these findings will undermine the programme going forward.

When customers in debt are on pre-payment tariffs they will repay their debts and also incur daily standing charges – on top of paying more for their energy at a higher unit cost. This can often lead to customers being “disconnected by the back door” as the cost of servicing debt and standing charges leaves them with no money for energy.

The End Fuel Poverty Coalition now advises any customers to check all messages from energy firms and if they are contacted about a pre-payment meter installation to contact the Good Law Project who are looking to challenge these transfers.

Jacky Peacock from Advice for Renters commented:

We are aware of some families who sign Agreements for the switch to PPMs without understanding what they are signing up for.

This affects people who are not fluent in English the worst, with many just thinking that this is a way to avoid big bills they cannot afford to pay.

Nobody from the energy industry explains that if they don’t constantly top up the meter to cover their debts and the ongoing standing charge as well as the energy they need, they could be left disconnected.

Ruth London from Fuel Poverty Action added:

MPs have recently told the Government that their constituents would die this winter – unable to access even light, a phone, hot water, or urgently needed medical equipment that depends on power.

They said they did not want to go home to a warm Christmas, leaving people who are ill or old to die in misery, or leaving children in the cold and dark.

They asked for at least a moratorium on this practice, which amounts to disconnection by the back door.

In response to the urgency of this crisis, the Minister promised to do absolutely nothing.

Graham Duxbury, Chief Executive of Groundwork UK:

Smart meters and pre-payment meters can be a great tool for people to take control of their energy use. In the current energy price crisis, however, forcibly switching people to pre-payment meters could have massively detrimental consequences, impacting on people’s physical and mental health.

Our Green Doctor energy advisers are seeing more and more households being switched to pre-payment meters because of relatively small debts.

The answer is not to drive people into greater hardship, but to provide more, and better coordinated, independent advice so that people can navigate a challenging winter without falling into crisis.

ENDS

[1] The Bureau of Investigative Journalism obtained the data through Freedom of Information requests to Ofgem. Data only available for Q1 and Q2 2022. Figures apply to England, Scotland and Wales only. The 46,082 households switched to smart meter PPM mode by suppliers in Q1 and Q2 2002 is more than the number switched to PPM mode in the whole of 2021 (43,072).

[2] 2,186 people interviewed between 20-21 December 2022. Results were weighted to be representative of the GB population. A vulnerable household is defined as having a child under 6, an adult over 65, a person who is disabled or with a long term health condition.

[3] Figures relate only to people on Smart PPMs, not legacy PPMs. 53% stat from previous research for Warm This Winter, which interviewed 2,198 people between 29-30 November 2022. Results were weighted to be representative of the GB population.

Pre-payment meters pressure mounts on government and suppliers

The pressure on the Government and energy firms to ban the forced transfer of households to pre-payment meters (PPMs) is growing.

The scandal, revealed in the i paper, that energy firms have secured almost 500,000 court warrants to install these PPMs in homes of customers in debt, has led to debates and questions in the Houses of Parliament.

The House of Commons agreed to a motion put forward by Anne McLaughlin MP that:

That this House… is deeply concerned that so called self-disconnection of prepayment meter customers will see the most vulnerable in our society left without heat, light and facilities to cook and wash over the coming winter; and strongly urges the Government to outlaw self-disconnection to ensure that the poorest and most vulnerable customers are not left without basic energy provision.

Further questions from MPs across the political spectrum have challenged the legal process followed by energy firms and magistrates – with media reports likening the situation to the “Wild West.”

In response, OVO Energy has introduced a temporary ban on forcing people onto prepayment meters over Christmas – but insists the practice will resume in the new year.

The firm’s promise came in response to a demand from campaign group 38 Degrees, who recently wrote to all the UK’s major energy suppliers urging them to stop forcibly installing prepayment meters and remotely switching smart meters to prepayment mode without customer consent.

OVO also highlighted its suspension of debt recovery until at least March 2023 – meaning all customer top-ups will be used to pay for usage and standing charges only, not to pay off existing debts. But this will only be a temporary reprieve if debt collection restarts in the spring – when energy prices are once again set to rise.

Tens of thousands of people have now added their names to a 38 Degrees petition addressed to the CEOs of Britain’s major energy companies, demanding a total end to any switching without active, informed consumer consent.

People can add their name here: https://act.38degrees.org.uk/act/stop-forced-prepayment

Matthew McGregor, CEO at 38 Degrees, said:

By pledging not to push anyone into prepayment over the Christmas period, OVO is demonstrating they know just how damaging it is.

While it may be good news that struggling families won’t wake up to a prepayment meter on December 25th, they could still be facing disconnection by the backdoor come January.

If it’s not acceptable at Christmas time, why should this harmful practice be considered business as usual for the rest of the year?

Every single time these multi-billion pound companies push a prepayment meter onto someone who is struggling, they’re risking another customer facing the stark choice between feeding the meter and feeding their family.

But they have the chance to do the right thing: put people before profit by committing to end all forced transfer to prepayment.

The Chancellor, Jeremy Hunt, said in response to a question in the House of Commons from Gerald Jones MP on Tuesday about to need for extra support for customers on the meters:

We will continue to monitor the situation over the months ahead because we are aware of the extreme vulnerabilities of this group.

But a spokesperson for the End Fuel Poverty Coalition, said the Government needed to go further:

Even the energy firms are now waking up to the reality that pre-payment meter customers are struggling in cold damp homes this winter.

Research for the Warm This Winter campaign has shown that PPM customers are likely to be vulnerable or have health conditions made worse by being unable to stay warm.

Many will have been forced onto a pre-payment meter against their will.

With MPs and charities increasingly concerned for the wellbeing of people in cold damp homes, we cannot leave their safety to chance.

The Government must act urgently to ban any further forced installations of pre-payment meters either by court warrant or by smart meter.

Number of pre-payment meter customers living in cold damp homes revealed

Pre-payment meters (PPMs) are forcing people to live in cold damp homes, according to new research. [1]

The figures, for the Warm This Winter campaign, reveal that 64% of pre-payment meter customers are vulnerable, with 51% having health conditions or disabilities.

Over one in ten (13%) PPM customers have already self-disconnected by massively reducing their energy supply. The situation is even worse among those on traditional PPMs (like those installed via court warrant) compared to those on smart meter PPMs [2].

Almost a third (31%) of PPM customers now live in cold damp homes (more than the national average of 19%). Among those customers who are on PPMs and also classified as vulnerable, the situation is even more stark, with 14% disconnecting and 36% now living in a cold damp home.These figures are before the current predicted cold snap kicks in and increases energy bills further.

Pre-payment meters could cost customers in excess of £200 more for their energy this winter. A recent investigation for the i paper, revealed that energy firms have secured almost 500,000 court warrants to install these meters in homes of customers in debt since the end of lockdown.

When customers are on pre-payment tariffs they will repay their energy debts and also incur daily standing charges – on top of paying more for their energy at a higher unit cost. This can often lead to customers “self-disconnecting” as the cost of servicing debt and standing charges leaves them with no money for energy.

In some cases, customers volunteer to go onto a prepayment meter, but research for one energy firm suggested that in 14% of cases, this was done without a customer’s active, informed consent. [3]

The End Fuel Poverty Coalition has called for a ban on the forced transfer of customers to pre-payment meters. A spokesperson commented:

People on low incomes have always saved energy, but if people self-disconnect or drastically reduce their energy use, they are at risk from the severe health complications of living in a cold damp home.

Children and those who are elderly, disabled or have pre-existing medical conditions are especially vulnerable this winter.

The research shows the scandal of people condemned to a winter of misery – forced on them by energy firms.

These firms appear to be manipulating the courts to push people onto pre-payment meters.

The i investigation went on to uncover that in some cases courts are “batch approving” applications for warrants. In one series of cases, seen by the journalist, almost 500 applications for pre-payment meter warrants were issued in just under four minutes.

The investigation comes after a weekend of “Warm This Winter” protests in more than 40 locations across the UK. Ruth London of Fuel Poverty Action took part in the day of action and commented:

There is growing anger at the absolute poverty so many people are facing now – it feels like going back to Victorian times and many will not survive this winter.

And why? There is plenty of money. Energy corporations are making eye-watering profits from the money we are paying them. Patriotic Millionaires are crying out to be taxed. And meanwhile people are dying in cold, uninsulated homes.

Fuel Poverty Action is fighting for Energy For All – enough energy free for each home to cover the basics like heating and lighting, paid for by windfall taxes, ending the millions spent daily on fossil fuel subsidies, and higher tariffs for luxury or wasteful energy use.

With temperatures set to plummet this week, the National Pensioners Convention has called a protest against excess winter mortality rates on Thursday 8 December 2022, 12 noon (meet George V Statue, Old Palace Yard).

Caroline Abrahams, Charity Director at Age UK, said:

People on pre-payment meters (PPMs) are some of the most vulnerable among us. I dread to think how many older people have been affected by the 500,000 warrants issued for forced PPM installations since the end of lockdown.

PPM charges are generally higher than charges for those paying by direct debit, leading to higher rates of fuel poverty among this group.

Although PPMs are included in the Government’s £400 energy bill discount scheme, many are missing out on this much-needed help because of problems with the vouchers that are being issued for those on older meters. In fact we estimate that at least 150,000 older households relying on an old PPM will miss out on the £400 and worryingly, recent Government figures suggest over 40% of vouchers sent to PPM households are yet to be redeemed.

We want to see a promotional campaign to encourage those people with old PPMs to redeem their vouchers, with repeat vouchers dispatched to homes yet to redeem and extensions given to expiry dates. The Government and Ofgem must also consider a moratorium on forced PPM installations until energy prices stabilise to avoid older people self-disconnecting this winter.

ENDS
[1] 2,198 people interviewed between 29-30 November 2022. Results were weighted to be representative of the UK population. A vulnerable household is defined as having a child under 6, an adult over 65, a person who is disabled or with a long term health condition.

[2] 18% of those on old fashioned PPMs and 7% of smart meter PPM customers have massively reduced their energy use with a further 33% of old PPM and 53% of smart PPM households somewhat reducing consumption.

[3] Research by Utilita, reported in The Sun, indicates that while 86% did choose to be on a PPM, this would imply that as many as 14% of the 4.5m PPM households (i.e. 630,000 households) did not actively choose to be on the tariffs.

Immediate ban needed on forced pre-payment meter transfers

The devastating impact of forced transfer of households onto more expensive Pre-Payment Meters (PPMs) has led the End Fuel Poverty Coalition to call for an immediate ban on their imposition.

Energy firms’ licence conditions protect many vulnerable people from formal disconnection over the winter, however evidence from End Fuel Poverty Coalition members shows that customers in debt who are forced onto a PPM by their supplier will often “self-disconnect” and stop using energy.

Reports have established that energy suppliers are now using PPMs more often as a method of revenue protection. This includes:

Using court warrants – where campaigners believe magistrates courts may be “rubber stamping” warrants to install meters. Freedom of information requests revealed 187,000 such applications were made in the first six months of 2022 so it is difficult to believe these are approved on a case-by-case basis.
Inappropriately switching smart meters from credit to prepayment mode, thereby forcibly installing PPMs remotely.
Failing to follow due process, including assessing households for vulnerabilities, ensuring it is safe to install a PPM and ensuring customers receive the required warnings of the impending change.

Ofgem recognised that this is a breach of licence conditions and wrote to energy firms urging them to stop this practice. However, anecdotal evidence from End Fuel Poverty Coalition members suggests this continues to occur where it is not appropriate to do so.

The Coalition has called on the Government and Ofgem to:

Ban switching customers to a prepayment meter under warrant and ban switching smart meters to PPM mode without active, informed, consumer consent.
With rising levels of arrears and self-disconnections further support should be provided from Government and suppliers in the form of payment matching and debt write-off schemes.
Ensure that the combination of the price cap and Energy Price Guarantee eliminates the premium that PPM users pay for their energy.
Remind magistrates of their duty to consider warrant applications on their individual merits and end the batch approval of warrants for PPM as is currently taking place.

Jan Shortt, General Secretary of National Pensioners Convention, said:

Customers have an opportunity to discuss with their energy company the best way to resolve any debt. To override this option is in breach of the protocol for energy companies.

Customers must be the first to know not the last and must be protected from such unscrupulous energy companies. We have written to Ofgem to urge the Regulator to immediately intervene to ensure this is so.

Where customers do not see pre-payment as the right option for them, they must immediately be returned to their original smart meter plan.

Ruth London of Fuel Poverty Action said:

Imposition of a pre-payment meter is disconnection by the back door. When you can’t top up the meter everything clicks off, regardless of whether you are old, ill, or have a newborn baby.

Now smart meters are being used to cut people off supply by imposing pre-payment remotely. We were all encouraged to get smart meters and told they would help us save money. Some people always suspected they would be used for illegal disconnections. They have been proved right.

Pre-payment should be a voluntary option. Imposing it is violent, and in the present situation it is likely to swell the numbers of excess winter deaths.

Joe Cole, CEO, Advice for Renters, commented:

One of our clients who suffers from PTSD was switched from his smart meter to pre-payment without notice and came close to suicide before the energy company were alerted by us and put his account back into credit.

Jo Maugham Executive Director, Good Law Project, said:

Utility companies are repeatedly failing their supplier obligations and the customer safeguards that are in place, and are applying to the already overstretched courts for 10,000s of warrants a month to force their way into people’s homes to fit pre-payment meters. This puts people at risk of self-disconnecting and the health risks of cold, dark, damp homes. This is unacceptable and we are exploring legal routes to put a stop to it.

A spokesperson for the End Fuel Poverty Coalition added:

Self-disconnection is as dangerous as disconnection by any other means and energy firms need to be alert to the pain they are causing consumers by switching them to pre-payment meters without their active and informed consent.

If people don’t keep their homes warm, they are at risk from the severe health complications of living in a cold damp home and those who are elderly, disabled or have pre-existing medical conditions are especially vulnerable this winter.

ENDS

All sources and detail available at https://www.endfuelpoverty.org.uk/about-fuel-poverty/forced-pre-payment-meter-transfer/

Customers can contact the Good Law Project by emailing legal@goodlawproject.org