Energy firms told to pay compensation over wrong meters

Energy firms should start compensating customers whose homes were wrongfully fitted with a prepayment meter, without waiting for the results of a major review, the regulator has said.

Ofgem chief executive Jonathan Brearley said companies must review their own meter installations immediately.

A six-week pause in forced prepayment fittings lasts until the end of March.

It came after debt agents for British Gas broke into vulnerable people's homes to force-fit meters.

Ofgem is now outlining the terms of its review into the rules, regulations and guidance surrounding prepayment meters.

The investigation - which will be complete by the end of March - will include submissions from the public. Information about how customers can offer details of their experiences will be announced soon.

Mr Brearley said any systematic problems would lead to fines for suppliers but he said the regulator had been clear to companies about the rules - and rejected the accusation that Ofgem had been too slow on the issue.

"If companies know they inappropriately installed a prepayment meter, then they should fix it now," he told BBC Radio 4's Today programme.

He said this meant switching the meter back to a regular one, if that was what the customer wanted, and giving compensation.

The regulator will also conduct a targeted investigation into the actions of British Gas, specifically about whether it followed the rules under its licence to support customers in debt before force-fitting prepayment meters.

Mr Brearley said that "clearly something has gone wrong" at British Gas and that the investigation would be independent and wide-ranging.

Prepayment meter customers top-up their meter with credit, which then runs down as they use energy at home.

Charities and campaigners say many have been left unable to afford to put money into their meters owing to soaring energy prices and other cost-of-living pressures.

However, the trade association for suppliers - Energy UK - has regularly highlighted that suppliers can be left with unpaid debts from customers who do not pay their regular bills.

Without the option of moving people onto prepayment meters, these mounting debts would have to be recovered from everyone else's bills.

There are more than four million UK households on prepayment meters.