Energy regulator clamps down on charges for installing meters
Updated : 01:36
Ofgem, the energy regulator, has clamped down on charges providers can impose on indebted customers to instal prepayment meters.
From January 2018 Centrica, SSE and other providers will be allowed to charge a maximum £150 for installing a prepayment meter under warrant for customers in debt. For the most vulnerable, charges will be banned, Ofgem said.
Suppliers can apply to a court to instal a prepayment meter when a customer falls into debt and charge them for the cost. The average cost is £400 but costs can be as high as £900 including court expenses.
Ofgem said the cost of the meter could push vulnerable customers further into debt. For customers in severe financial difficulty charges will be barred and companies will not be allowed to impose meters on people with mental health problems or others who would be traumatised.
Rachel Fletcher, Ofgem's senior partner for consumers and competition, said using a warrant to instal a meter should be a last resort and that providers should step in earlier to help customers manage their debts.
She said: “Protecting vulnerable customers is a priority for Ofgem. At the moment vulnerable customers face a double blow when they’re hit with high warrant charges on top of existing debt – risking making their situations worse.
“The measures will protect all consumers, including the most vulnerable, from experiencing unnecessary hardship due to having a meter installed under warrant."
The clampdown is the latest measure to protect vulnerable energy customers as the government consults on a proposal to cap prices for household consumption. The prime minister has said she wants to end "rip-off" charges that penalise customers who do not shop around for the best deals.
Ofgem introduced a safeguard tariff in April to protect customers on prepayment meters from overpaying for energy. The regulator is extending the tariff to 1m vulnerable households in February and may add a further 2m customers depending on the government's plans for its cap.