Prepayment meter installation costs will be capped for households having them installed under a court warrant after falling into energy debt.
Currently, suppliers can charge warrant costs back to affected customers, including court costs. Dual fuel households pay £400 on average to cover these costs, but they can rise to £900.
Energy regulator Ofgem says this risks pushing customers further into debt, which is why it’s acted to introduce a £150 cap on costs from January 2018.
Installations will also be banned entirely for the most vulnerable customers, such as those in severe financial difficulty, and for those whom the experience would be severely traumatic, for example, due to mental health issues.
At the end of 2016, around 15% (3.5 million) gas and 16% (4.5 million) electricity customers used prepayment meters. Around 7% and 6% (roughly 250,000 and 300,000) of these respectively were in debt to their energy supplier. In 2016, 40,000 gas prepayment meters and 41,000 electricity prepayment meters were installed under warrant.
Rachel Fletcher, Ofgem’s senior partner for consumers and competition, says: “At the moment vulnerable customers face a double blow when they’re hit with high warrant charges on top of existing debt – risking making their situations worse.
“We want to send a strong message to suppliers that using a warrant to install a pre-payment meter is a last resort. They must step in early to help customers manage debt through repayment plans.”
In April, the price of pre-payment meter tariffs was capped until 2020 when smart meters will be rolled out, due to a lack of competition reducing prices for these customers.