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08/10/2019

Energy Prepayment Meters: What You Need to Know

08/10/2019

Energy Prepayment Meters: What You Need to Know

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Over 5.9 million people in the UK are currently using prepayments meters to pay for their gas and electricity.

The way prepayment meters work is a bit like pay as you go phones: providing you top up, you can use the service, but if you don’t, you will find you are disconnected.

Prepayment meters can be topped up in a variety of ways, either using a smartcard, token or key fob that you take into a local shop.  Some meters may even let you put money into them directly in the form of coins; whilst some energy firms are now allowing their customers to top up online by using a mobile phone app.

What are the advantages and disadvantages of a Prepayment Meter?

For some people, having a prepayment meter is ideal, as it allows them to see what they are spending and that helps them budget. They also don’t need to worry about getting bills every month or quarter.

However, for others, prepayment meters are a source of fear and dread, as if the meter needs topped up and they don’t have the money, then they disconnect themselves and are left without heating or light.

Also, for many, prepayment meters are only installed after they fall behind with their gas and electricity bills.  They are then given a stark option: accept the meter or face disconnection. Once the meter is installed, the energy firm them begins clawing back the arrears by making deductions from any money paid in. For many it feels like they are just feeding money into the meter to watch it disappear.

Can you be forced to accept a Prepayment Meter?

Ultimately, you can be forced to accept a Prepayment Meter if your energy provider applies to a Court for an order allowing them to install it.

This action, however, should only be taken as a last resort, and firms should try and agree an affordable repayment plan with you first, where your monthly payment will include an amount for your current usage and an amount for your arrears.

Where such a repayment plan cannot be agreed, the firm will then propose you let them install a prepayment meter and for the arrears to be recovered through that.

However, if you still refuse this, then they may apply to the courts for an order allowing them to install the meter.

Although this may seem harsh, energy firms argue it is better than disconnecting people and leaving them with no energy supply.

How many court orders are granted?

In 2017, energy firms obtained 84,000 court orders to install prepayment meters, up from 81,000 in 2016, with some firms (often the smallest) installing more than others.

Utility Warehouse, for example, installed five times the average per head for the industry, whilst British Gas installed twice as many as the industry average.

This led to OFGEM, the industry regulator, warning firms, that installing meters to recover debt, should be the last resort.

Can you object to a Prepayment Meter being installed?

You can object to a prepayment meter being installed if your energy provider has not offered you other ways to repay your debts first.  This could mean a repayment plan or the offer of deducting payments from your social security benefits, where that is a source of your income.

You can also object to a prepayment meter being installed if your meter is located somewhere that is inaccessible, meaning you won’t be able to use it, or to do so would place you at risk.

However, where this argument is used, the firm may offer to relocate the meter somewhere that is safe for you to use it. .

Alternatively, if you are ill or disabled and your illness or disability would mean you could not use the meter, you can object on those grounds.

Where you have grounds for refusing a prepayment meter, you should make a complaint if the firm insists on installing one.

What debts can be recovered using a Prepayment Meter?

The debts a firm can recover using prepayment meters are the arrears you have run up with them at the property where they want to install the meter, providing you were the account holder when the arrear were run up.

They cannot recover arrears from a meter for an account you had for another property you lived in, unless you agree to them doing so and enter into a formal agreement with them.

They also cannot use a meter to recover arrears for any other services they supplied you with, other than the one the meter is for.

Finally, where someone else was the account holder when the arrears were accrued and then leaves or dies, you cannot be held liable for that debt, even if you lived in the property at the time. Some firms will try and argue that although you were not named, you were a beneficial user, so you still have to pay, but this is not correct. Where a firm does this, you should complain. You should also insist any monies that have been deducted from your meter to pay these arrears should be re-credited to your account.

What happens if you become insolvent?

If you become bankrupt, sign an Individual Voluntary Arrangement or a Protected Trust Deed, the firm should stop recovering any arrears you had prior to you becoming insolvent.

Utility bill debts are like other debts, and energy firms must make a claim to your Insolvency Practitioner for the arrears and not recover them from you directly.

If you are struggling with problem debts, speak with a Creditfix adviser for free on 0808 2234 102.

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