Octopus Energy, EDF and Scottish Power have been granted permission to return to forcibly fitting prepayment meters (PPMs) as the firms have met Ofgem’s set of conditions.
All suppliers were temporarily banned last year, following a scandal around the practice across the industry.
The energy regulator Ofgem said the conditions met by the three firms include conducting internal audits to identify PPMs wrongfully installed before the February 2023 suspension and offering compensation and a return to a non-prepayment payment method to any affected customers.
The watchdog said once suppliers meet the conditions and restart “involuntary” PPM installations, they will also need to provide regular monitoring data to Ofgem to identify any concerning practices.
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Customers and consumer groups can check energy suppliers that can install prepayment meters without getting a household’s permission online via the Ofgem website.
EDF, Octopus Energy and Scottish Power will need to make at least 10 attempts to contact a customer before a prepayment meter is installed.
They will also need to carry out a site welfare visit before proceeding.
The suppliers are not allowed to forcibly fit a PPM if the household is considered to include “highest risk” customers.
This group includes those requiring a continuous energy supply for health reasons, an older occupant aged 75 and over without support, or those with children under two years old.
All energy companies signed up to a code of practice governing the installation of prepayment meters.
It was introduced after an investigation found evidence of bad behaviour by suppliers severely affecting struggling customers.
Ofgem says energy chief executives have been reminded of their responsibility to treat customers fairly when installing “involuntary” PPMs.
The regulator has also warned them that if they don’t follow the new rules, they could face tough action and fines.
Ofgem’s director general for markets, Tim Jarvis, said protecting consumers is the regulator’s “number one priority”.
He said: “We’ve made clear that suppliers must exhaust all other options before considering forced installation of a prepayment meter, and consumers can help themselves by reaching out to their supplier as soon as possible if they think they won’t be able to pay their bill, so payment options can be discussed.
“Our rules on when, and how, a prepayment meter can be installed are clear and we won’t hesitate to take action if suppliers act irresponsibly.
“While nobody wants to see the practices uncovered last year repeated, we also know that allowing households to build up unsustainable amounts of debt isn’t the right thing to do either.
“Many households value the control that these pay-as-you-go meters offer over bills and how they can help with budgeting, and suppliers must also be able to recover debt to make sure those costs don’t end up on everyone else’s bills.”
Mr Jarvis added: “We will continue to work closely with consumer groups and suppliers to make sure households understand their rights when it comes to prepayment meters, and will regularly review our rules to make sure they are working to protect the most vulnerable.
“I’d also strongly encourage consumers to make sure their personal details and circumstances are up to date with their supplier, so they can be taken into consideration if or when payment problems arise.”
Citizens Advice chief executive Dame Clare Moriarty said: “Last winter, we all saw that the rotten core of debt collection practice in the energy sector was not just a case of one bad apple – the rules were simply not being followed.
“As the temporary ban on force-fitting comes to an end, people need reassurance from suppliers that they won’t be wrongly forced onto a meter when there’s clear evidence they shouldn’t be.
“Ofgem must proactively monitor suppliers and act swiftly if there are any suspicions rules are not being followed.”
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “It is outrageous that energy firms are seeking to use the courts to force people onto prepayment meters in the middle of winter.
“These meters have the potential to leave them without heating in the middle of winter.”
Mr Francis said the campaign group still has “grave concerns” about the processes energy firms have in place for assessing vulnerabilities.
He added: “Ultimately, without a change in the law, we knew this day would come.
“MPs and ministers – who ignored pleas to introduce a full ban – can only hope that it is not their vulnerable constituents who are forced onto these meters.
“If anyone receives a court summons from their energy firm they must contact Citizens Advice, a local law centre or other advice provider as soon as possible to see if help is available to them.
“Customers should not ignore these letters as the consequences of doing nothing could be severe.”
Jonathan Bean, from Fuel Poverty Action, said: “We are horrified that Ofgem has taken the cruel and dangerous decision to allow Scottish Power and others to break into homes and limit energy supplies in the middle of winter.
“This will leave many people traumatised and cold.”
A spokesperson for EDF said: “We have a duty to keep bills as low as possible, especially given customers are struggling, and rising debt levels are leading to all households facing bigger bills.
“It is important to restart, under strict supervision from the regulator, processes that help individual customers get out of debt and protect all customers from additional charges.
“Smart Pay As You Go meters provide the cheapest rates, without needing to visit a shop to top-up, and enable us to provide support quickly if customers run into difficulty.”
Octopus Energy said they have “no plans” to restart involuntary installations. The supplier said they have only ever carried out involuntary installations in “extremely rare circumstances” and “any response at all from customers can halt” the process. The provider also said they constantly check for vulnerabilities.
A ScottishPower spokesperson said: “While we have met Ofgem’s strict criteria and been authorised to restart involuntary prepayment meter installations, where appropriate, this is always a last resort. Our focus will continue to be on supporting our customers to manage their debt and avoid the need for such action.
“If any customer is struggling to pay, we would urge them to contact us or speak to a debt charity right away, so we can take their situation into account and get them the help they need. Talking to us will also allow us to determine whether a prepayment meter is appropriate for their individual circumstances or not, in line with the regulator’s strict rules and licence conditions which we have met.”
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
