Grant Shapps, Business and Energy Secretary, pledged today (22 January 2023) to crack down on suppliers’ mistreatment of energy users, following reports that some are doing far too little to assist vulnerable customers.

He has written to energy suppliers, urging them to stop the harmful and anxiety-inducing practice of forcing consumers to switch to prepayment metres without taking all reasonable steps to assist consumers in need.

The Business Secretary is asking suppliers to voluntarily commit to ending this practice and holding them accountable by requiring them to share the number of warrants they have applied for in recent months.

He would like to see suppliers make much greater efforts to assist consumers in payment difficulties before resorting to forced prepayment switchings, such as offers of additional credit, debt forgiveness, or tools such as debt advice. In his letter, he requests that suppliers discuss any additional steps they can take to assist customers and avoid forced fitting.

This action is part of an effort to increase transparency around prepayment metre installations in order to identify the worst offenders and determine which energy companies are eager to apply for them.

Courts are being inundated with warrant applications, which are being approved in large batches in a matter of minutes, according to reports. The Business Secretary is collaborating with Ofgem and the Secretary of State for Justice to ensure that the process by which suppliers bring these cases to court is fair and transparent, and that vulnerable customers are not harmed.

Grant Shapps, Secretary of State for Business, Energy, and Industrial Strategy, stated:

“Suppliers are clearly jumping the gun and moving at-risk customers onto prepayment metres before offering them the support they are entitled to – I simply cannot believe that every possible alternative has been exhausted in all these cases.

“I am deeply concerned to see reports of customers being switched to prepayment metres against their will, with some disconnected from supply – and quite literally left in the dark.

“Rather than looking for a new way to extract money from customers, I want suppliers to stop doing so and lend a more sympathetic ear, offering the kind of forbearance and support that a vulnerable customer struggling to pay should be able to expect.”

This follows reports that the number of customers switching to prepayment metres has risen in recent months, often unwillingly and without assistance. In some cases, this has resulted in vulnerable customers’ gas and electricity supplies being cut off with little or no notice.

Prepayment metres enable customers to pay for gas and electricity on a pay-as-you-go basis and play an important role in avoiding debt and court action. A moratorium on forced prepayment switching could result in an increase in bailiff action, which the government wishes to avoid.

Forced switching to prepayment must only be used as a last resort under Ofgem rules, but with the country grappling with energy prices, more people have struggled to pay their bills, resulting in forced installations and self-disconnection. As a result, some energy suppliers are already taking steps to assist consumers, such as pausing remote switching of smart metres to prepayment mode or providing additional credit to customers who are having difficulty paying. To avoid forced fitting, the Business Secretary wants all suppliers to step up their support.

Graham Stuart, Minister of Energy and Climate Change, stated:

“Switching users onto a prepayment plan should only ever be a very last resort and suppliers have a duty to exhaust all other avenues. It cannot be right that so many consumers are being let down in this way at a time when they require compassionate treatment more than ever.

The government will continue to do everything we can to keep families and households warm this winter, and we’re taking immediate action to bring greater transparency to bad energy supplier practises.

Concerns have also been raised about the low number of vouchers redeemed under the Government’s Energy Bills Support Scheme, which means that many vulnerable households have not had money deducted from their energy bills. Suppliers are urged to make every effort to ensure this occurs, with the government planning to publish a list of supplier redemption rates, indicating who is meeting their obligations and who needs to do more.

The Business Secretary is concerned about the low take-up of traditional metres in prepayment mode and has called for more transparent reporting of voucher redemption rates. He has advocated for the replacement of traditional metres with smart metres, which can automatically receive government support payments and detect self-disconnection.

Mr Shapps has written to Ofgem, requesting that it do more to ensure that suppliers protect vulnerable consumers. This includes reconsidering their approach to enforcing supplier compliance and publishing the results of recent investigations into vulnerable customers as soon as possible. Graham Stuart, Minister for Energy and Climate Change, has asked energy suppliers Ofgem, Energy UK, and Citizens Advice to meet with him at the Department for Business, Energy, and Industrial Strategy next week to discuss the situation further.

The following actions are included in the five-point plan to address bad behaviour by energy suppliers:

A call for suppliers to voluntarily discontinue the practise of forced prepayment switching as a response to bill-paying difficulties and to make greater efforts to assist the most vulnerable.
Request for data on the number of warrant applications submitted by suppliers to forcibly enter homes to instal metres.
Urgent publication of a list of supplier redemption rates for Energy Bills Support Scheme vouchers, demonstrating who is meeting their obligations and who needs to do more.
The launch of a government public information campaign to remind and inform eligible consumers about the need to redeem their Energy Bill Support Scheme vouchers, as well as how to do so. This will be accomplished through both advertising and direct communication channels, with a focus on the most vulnerable individuals and those who are unlikely to have redeemed vouchers.
Coordination with Ofgem ensures a more robust approach to vulnerable customer protection and a review to ensure suppliers are in compliance with rules.
The five-point plan is part of a larger effort to protect energy users during this difficult time, and the government is looking into longer-term solutions.