WIREDGOV

• Ofgem review reveals a variation in suppliers’ treatment of prepayment meter (PPM) customers
• Ofgem seeks early agreement by suppliers  to abolish costs for installing and removing PPMs to make switching easier
• Ofgem is working with suppliers to tackle lack of tariff choice and to ensure PPM customers are treated fairly

Ofgem yesterday called on all energy suppliers to treat PPM customers fairly as its review shows disparity in the treatment they’re receiving. 

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.

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.

Ofgem is committed to helping those consumers who can’t switch or do not wish to switch from a prepayment meter. More suppliers than ever are offering PPM tariffs, but there is limited choice overall compared to direct debit and standard credit. Some suppliers identified technical barriers to lack of tariff choice for PPM customers, and Ofgem is investigating this to help consumers access more competitively-priced energy.

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