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Ofgem proposes capping prepayment meter warrant charges for indebted consumers
Ofgem proposes capping warrant charges for all customers
Proposals would ban warrant charges, and in some cases installations, for the most vulnerable customers.
Current PPM installation charges under warrant can range from £200 - £900.
Ofgem has today published proposals to cap charges for installing prepayment meters (PPMs) under warrant. An option in our consultation includes placing a firm limit on charges of £100 or £150. The proposals also include plans to ban PPM warrant installation charges for the most vulnerable customers.
When customers fall in debt, one option is for their supplier to install a prepayment meter (PPM) under warrant. Installing a PPM under warrant should be a last resort for recovering debt, to resolve situations where consumers can’t or won’t engage with suppliers to agree a resolution.
Under current rules, suppliers can charge warrant costs back to affected customers. These charges, which can include court costs, can range from £200 up to £900. In 2015, customers faced an average bill of £400 for having their PPM installed under warrant, risking pushing them more into debt.
Ofgem’s proposals aim to protect consumers from experiencing more debt or hardship due to warrant installations. These include capping at £100 or £150 warrant charges for all customers.
These also include plans to entirely prohibit PPM warrant charges, and installations, for the most vulnerable customers. This includes people in financial hardship, and people with physical and mental health issues and learning difficulties.
Consumer research shows that PPM consumers are more likely to be vulnerable.
Rachel Fletcher, Ofgem’s senior partner for consumers and competition comments: “It’s deeply unfair that struggling customers get hit with high warrant costs when they’re already grappling with debt, doubly penalising them.
“Ofgem’s role is to protect every consumer, including the most vulnerable. Suppliers need to help customers manage their debts.
“Suppliers need to ensure that PPMs are only installed under warrant as an absolute last resort. Where they are needed, our proposals will protect customers by limiting PPM warrant charges for all customers and removing them for the most vulnerable.”
For impartial advice on shopping around for the best PPM energy deal visit Ofgem's Be An Energy Shopper website.
Ofgem’s consultation, Prepayment meters installed under warrant: final proposals, closes 09 November 2016.
Notes to editors
- Around 15% (3.5m) of GB gas and 17% (4.5m) of electricity customers use PPMs. Around 8% and 6% (roughly 0.3m) of these respectively are in debt to their energy supplier. In 2015, 86,000 PPMs were installed under warrant.
- Our analysis shows some suppliers waive charges in many cases.
- Since 2013 there has been a reduction in the numbers of PPMs installed for debt and the number installed under warrant, following a long-term increase. However, the number of warrants has not been decreasing as rapidly as the number of customers in debt, and therefore it is clear that suppliers are continuing to actively use warrants for customers who get into debt. From April 2017, under Competition and Markets Authority remedies, PPM customers will be protected by an interim price cap which will save them around £75 a year.
- Ofgem’s PPM warrant charges cap is an interim measure until smart meters are rolled out across GB.
- Ofgem offers impartial advice for PPM customers about how they can shop around and switch.
- Citizens Advice also has advice for PPM customers.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For further press information contact:
Ruth Somerville: 0207 901 7460
Out of hours: 07766 511 470
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