…By Judah Olanisebee for TDPel Media. Ofgem Proposes Making Protections for Prepayment Meter Users Compulsory
Addressing Abuses and Strengthening Consumer Protections
Energy regulator Ofgem has launched a consultation on new proposals to make the voluntary rules protecting struggling households with prepayment meters mandatory for energy suppliers.
This move follows incidents of energy suppliers, including British Gas, forcibly installing prepayment meters in the homes of customers struggling to pay their bills.
Ofgem initiated an investigation into these practices after they were exposed publicly.
Ofgem’s response to the abuses by some energy suppliers demonstrates their commitment to safeguarding vulnerable consumers and strengthening consumer protections in the energy sector.
By making the existing voluntary code of practice compulsory, they aim to prevent further instances of forced installations and ensure a fairer process for customers.
Enhancing Consumer Safeguards and Aftercare Support
Under the voluntary code of practice, which was introduced in May, forcibly installing prepayment meters into the homes of individuals over the age of 85 is prohibited.
The updated rules also require energy suppliers to make at least 10 attempts to contact a customer and conduct a site welfare visit before considering installation.
All UK household energy suppliers have voluntarily adopted this code, but Ofgem now seeks to formalize these arrangements and make them legally binding.
Neil Kenward, director for strategy at Ofgem, emphasized the importance of robust protections for vulnerable customers and encouraged public participation in the consultation process.
The proposed mandatory nature of the code of practice ensures that all energy suppliers adhere to consistent standards when assessing the necessity of forcibly installing prepayment meters.
By maintaining a higher standard of aftercare support, Ofgem aims to alleviate pressure on the healthcare system by enabling customers to adequately heat their homes and prepare hot meals.
Compensation for Additional Support Credit and Winter Preparedness
In addition to making the code of practice binding, Ofgem’s proposals include compensating suppliers for providing additional support credit (ASC) to the most vulnerable prepayment meter customers.
ASC offers critical respite for customers facing extreme financial hardship and helps prevent self-disconnection.
Mr. Kenward highlighted the importance of ensuring energy suppliers have no reason to withhold ASC from customers in need, especially during the winter months.
Ofgem plans to monitor the level of ASC provided by suppliers.
The proposal to compensate suppliers for the cost of providing additional support credit reflects Ofgem’s commitment to ensuring vulnerable customers have access to essential services and are not left without energy supply during challenging times.
By incentivizing suppliers to offer ASC, Ofgem aims to strengthen support mechanisms for customers in need.
Conclusion:
The consultation period for the proposed code of conduct will conclude on July 26.
Ofgem expects to finalize and publish its decision before the winter season this year.
These measures are intended to establish a more stringent process for forcibly installing prepayment meters, ensure improved aftercare support, and enhance consumer protections in the energy sector.
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