OFGEM calls for level playing field for pre-payment energy customers

Electricity meterBy DARA BUTTERFIELD

UK regulator OFGEM has called on all energy suppliers to treat prepayment meter customers fairly as its review shows disparity in the treatment they receive compared to standard tariff consumers.

OFGEM identified that around 60% of suppliers do not charge for PPM installations and 95% of meter removals were carried out for free.

However, suppliers who do so, charge up to £180 and £160 for installing and removing PPMs respectively. The regulator also found that over 40% of suppliers don’t charge security deposits when customers wish to pay by standard credit or direct debit. For those who do charge, the average cost for consumers is £211.

Philip Cullum, Partner, Ofgem, said: “We are concerned that charges and costs for using a PPM fall on those least able to afford them. That’s why we want to remove barriers, deliver greater protections and offer more choice for prepayment customers to ensure they’re able to find the best possible deals. We are calling on suppliers to work with us to abolish charges as soon as possible.

“There are already good savings to be found in the energy market at the moment. Consumers can save up to £300 when switching from PPM to direct debit. Those looking for independent advice on shopping around should visit Ofgem’s Be an Energy Shopper website.”

OFGEM will now work with suppliers to abolish installation and removal charges ahead of an autumn consultation. These costs can put many people off from switching. Removing these barriers could help consumers save up to £300 per year if they switch payment methods from PPM to direct debit. Ofgem will also consult on strengthening consumer protections over security deposits to either put an end to their use, or if they are appropriate, provide clearer guidelines for suppliers.

 

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