Energy providers have been instructed to avoid installing prepayment meters as a solution for families struggling to pay their bills and to make stronger efforts to offer additional credit, debt forgiveness, and tools such as debt coaching.
Following concerns that certain energy providers are not doing enough to assist vulnerable consumers during the cost of living crisis, Grant Shapps has initiated a crackdown on the industry.
The Business and Energy Secretary has penned a letter to energy suppliers instructing them to cease the practice of installing prepayment meters as a solution for people failing to pay their bills, in response to a dramatic increase in such situations.
He has urged that they disclose the number of warrants they have requested for this reason so that the worst offenders can be identified.
Before resorting to the extreme of mandatory prepayment switching, Mr. Shapps wants to see considerably better efforts by suppliers to assist clients with payment difficulties, such as offers of additional credit, debt forgiveness, and instruments such as debt coaching.
He has also requested that providers examine other actions they may take to assist clients and prevent forced fitting.
The crackdown is part of an initiative to boost the openness of prepayment meter installations to identify the worst offenders and show which energy firms are overzealous in their applications.
It comes at a time when courts are inundated with an escalating number of applications for warrants. With allegations that enormous batches are being authorized in a matter of minutes.
Customers to shift to prepayment metres
The business secretary is collaborating with Ofgem and the justice secretary to ensure that the process by which suppliers bring these claims to court is fair, transparent, and supportive of vulnerable consumers.
Mr. Shapps stated, “Suppliers are jumping the gun by shifting at-risk consumers onto prepayment meters. Before providing them with the support to which they are entitled. I simply cannot believe that every feasible alternative has been examined in all of these cases.”
He expressed “great worry” that customers are being switched against their will to prepayment meters. With some being unplugged from the power grid and “left in the dark.”
“Rather than instantly searching for a new method to extract money from customers. I want suppliers to halt this practice and provide a more sympathetic ear. Offering the kind of forbearance and assistance that a vulnerable client who is struggling to pay should be able to receive,” he added.
The government’s Energy Bills Support Scheme’s poor redemption rate of vouchers. Which prevents many disadvantaged households from receiving energy bill savings, has also drawn criticism.
Prepayment meters enable users to pay for gas and electricity on a pay-as-you-go basis. And can prevent debt and legal action. A moratorium on forced prepayment switching potentially leads to a rise in bailiff actions. Therefore, the government seeks to prevent this course of action.
Grant Shapps assault on energy suppliers driving financially constrained customers
Mr. Shapps has also written to Ofgem to ask what they can do to protect vulnerable consumers. Such as reevaluating their supplier compliance enforcement and releasing the results of recent investigations into vulnerable clients.
Graham Stuart, the Minister for Energy and Climate, has asked energy suppliers, Ofgem, Energy UK. And Citizens Advice to meet with him next week at the Department of Business, Energy. And Industrial Strategy to address the situation in greater detail.