Energy companies would only be allowed to charge £100 or £150 for installing prepayment meters (PPMs) under warrant if new Ofgem proposals released for consultation today go ahead. 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, when 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 paid £400 on average for having their PPM installed under warrant.
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, including people in financial hardship, and people with physical and mental health issues and learning difficulties.
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.”
Gillian Guy, Citizens Advice chief executive, welcomed the proposals. He said: “Warrant charges can make it harder for people struggling with gas and electricity debts. Not only do they have to face the extra costs of having a meter installed – which can be hundreds of pounds – prepayment meters are often more expensive than standard tariffs. This means people struggling with energy debt are then faced with higher gas and electricity bills.
“Capping the warrant charges and ending them altogether for vulnerable customers will help to stop people being pushed further into debt when they are already struggling to manage their costs.”
Following the CMA’s energy market inquiry a new safeguard tariff for prepayment meter customers will be introduced in April 2017.
Ofgem’s consultation, Prepayment meters installed under warrant: final proposals, closes 09 November 2016.
Related content:
Networks’ role in meeting social obligations could grow, says Citizens Advice
Will new auto-switch services change the game for energy customers?
Will consumers benefit from CMA remedies? Citizens Advice remains uncertain
Energy retailers: How are they changing?
Subscribe to New Power for full analysis, comment, interviews and data in our monthly report, and access to our database, or sign up to our FREE e-newsletter for website updates
Not a subscriber? To see if you qualify for our next FREE TRIAL send your name, job title, and telephone number to [email protected]