Government promises crackdown on the energy companies mistreating vulnerable customers

Ofgem has been urged to take a “more robust approach” to protecting vulnerable people as part of a five-point plan announced by the government to stop the harm being caused to energy customers on prepayment meters.

The energy regulator must conduct a review to ensure suppliers are complying with their licence conditions following widespread reports of poor practices from energy companies that are operating with a lack of oversight.

The “crackdown on energy customer mistreatment” comes just weeks after the Bureau revealed that thousands of vulnerable people across Great Britain – many of them chronically ill and disabled people – had been going without gas and electricity for days at a time.

Sue Rogers, a housebound woman with multiple disabilities, was often going without energy for 22 hours a day because of cutbacks and her mental health was deteriorating as a result. Disabled mother-of-two Gemma Carter had gone without gas for two and a half weeks at one stage.

Despite Ofgem’s longstanding principles outlining how to protect vulnerable people, and requirements for energy suppliers to report key data, the regulator knows very little about the number of people with disabilities or life-limiting health conditions who have been disconnected after failing to top up their prepayment meter.

A letter from the energy secretary Grant Shapps to Ofgem asks that the watchdog “do more to make sure suppliers protect vulnerable consumers”, including revisiting its approach to compliance among energy companies and urgently publishing the outcomes of recent investigations into vulnerable customers.

Much of the government’s focus is on clamping down on energy companies’ abuse of legal powers that allow them to forcibly install prepayment meters into people’s homes with a court warrant.

The Big Issue had revealed in July that courts across England and Wales had granted more than 187,000 such warrants for homes and businesses in the first six months of 2021. The i newspaper then reported in December that nearly half a million had been handed to debt collection agents to force their way into properties since July 2021 – and just 72 had been refused.

The i’s investigation also exposed the obscure court process that had led to magistrates approving warrant applications with “little or no oversight of people’s vulnerability or health issues”. The government says it wants to know which energy companies are “trigger happy” in applying for court warrants, with Shapps adding that he “simply cannot believe that every possible alternative has been exhausted in all these cases”.

He also expressed concerns about smart meter customers who have been switched from a credit to prepayment tariff against their will, or sometimes without their knowledge, which has been described by Citizens Advice as “disconnection by the backdoor”. Smart meters can be turned to prepayment mode without a court warrant.

With the End Fuel Poverty Coalition, the Bureau published fresh data this month reporting the number of customers whose smart meters had been switched remotely from credit to prepayment mode during the first half of 2022. The data, obtained via Freedom of Information request to Ofgem, shows that 64% of all electricity customers with smart meters had seen their meters switched to recoup debt on behalf of their supplier. The equivalent number for gas customers was 60%. This amounted to nearly 78,000 customers.

Some of these people could be unaware of what they are agreeing to, said Jacky Peacock from Advice for Renters. She added: “It affects people who are not fluent in English the worst, with many just thinking that this is a way to avoid big bills they cannot afford to pay.”

The government is asking energy suppliers to voluntarily stop the practice of forced prepayment switching – rather than enforcing a complete stop – and wants to know how many court warrant applications have been made to forcibly enter homes to install meters.