Smart meters are turning into debt collecting gadgets: Energy firms are making them ‘pre-payment’ remotely so customers have to buy credit before using electricity
- The Government wants all homes to have a smart meter by 2024 in rollout
- But energy giants are using them to force customers to pay for power up front
- Customers who struggle to pay bills could have power cut off, regulator says
- They may be penalised with bigger bills paying an extra £300 a year on average
Energy giants are using smart meters to claw back debts from customers and force them to pay up front.
The Government wants all homes to have a smart meter to monitor power usage by 2024, but the bodged rollout is set to cost at least £13 billion.
The number converted to pre-payment meters, often without homeowners’ consent, has more than tripled in 12 months.
The Department of Business, Energy and Industrial Strategy said last week that smart meters can help suppliers spot customers at risk of debt. It added that the new meters will also save suppliers money as they will not need to send engineers to install prepayment meters [File photo]
Watchdog Ofgem yesterday warned that customers who struggle to pay bills could have their power cut off.
They may also be penalised with bigger bills, paying an extra £300 a year, on average, the regulator said.
Most homes have a credit meter which allows them to use gas and electricity and then pay the bill at the end of the month or quarter.
However, if customers fall into debt suppliers often demand they switch to a pre-payment meter. Ordinarily, if an energy firm wants to forcibly install a prepayment meter, it has to go to court to get a warrant.
The Government wants all homes to have a smart meter to monitor power usage by 2024, but the bodged rollout is set to cost at least £13 billion. The number converted to pre-payment meters, often without homeowners’ consent, has more than tripled in 12 months [File photo]
Only then can a supplier access the home and install a new meter, but smart meters can be altered without visiting.
What is a prepayment gas/electricity meter?
A prepayment meter requires customers to purchase credit and add it to their account before they can use any power.
Customers can buy this online or from a shop. If the credit runs out they will not have access to gas or electricity.
Do I have to have one if I am in debt?
If you’re in debt, suppliers should first offer you other ways of repaying – such as an affordable repayment plan. Installing a prepayment meter should be a last resort.
What if I refuse?
If customers have a smart meter, providers can change payment models remotely without visiting their home.
For those with a traditional meter, suppliers can petition the court for a warrant to gain access to a property to install a prepayment meter at a cost of up to £150.
Will it cost me more if I don’t agree to one?
Smart meters are not compulsory and customers can refuse them.
However, with energy firms under immense pressure to meet strict deadlines to avoid hefty fines, many have resorted to bullying tactics to try and force customers to get one.
Some are bombarding households with calls, texts and emails implying the new meters are a legal requirement, while others are charging those who refuse hundreds of pounds more a year.
Smart meters are being rolled out to automatically send readings to suppliers and are to encourage households to cut consumption.
But the Government’s plan to install them in every home is behind schedule and over budget. Officials extended the deadline to 2024 last week.
Martyn James, of complaints service Resolver, said: ‘It is outrageous that energy firms are exploiting smart meters. These devices were supposed to help customers manage their money and meter readings – not cut off those struggling without having to even visit their home.’
There are now 1.31 million electricity customers and 1.05 million gas customers in debt with their supplier.
The Department of Business, Energy and Industrial Strategy said last week that smart meters can help suppliers spot customers at risk of debt.
It added that the new meters will also save suppliers money as they will not need to send engineers to install prepayment meters.
But Ofgem said: ‘When smart meters are remotely switched to prepayment, the opportunity afforded by a site visit to identify vulnerability or reasons why prepayment may not be safe can be missed.
‘Remote switching without the customer being notified or aware of prepayment meter functionalities can leave that customer off supply.’
Just under 70,000 smart meters were switched from credit to prepayment mode remotely to repay a debt in 2018 – up from 21,000 in 2017.
The increase was driven by British Gas and Spark Energy, before it ceased trading in November, the regulator said.
The number of prepayment meters installed under a court warrant fell by 15 per cent. One in ten households with one had power cut off in 2017.
Mark Todd of Energyhelpline said: ‘We need to make sure smart meters are not being weaponised to shift tardy payers onto prepayment meters.
‘We call on Ofgem to make sure these payment method changes are only made in extreme circumstances when the supplier has tried everything else.’
Trade body Energy UK said: ‘The energy sector is committed to improving services for all customers including those in most need and will work closely with Ofgem on how we can improve services further.’
British Gas said: ‘We only offer prepayment meters as a solution when it is the best option for that customer.’