Rise in energy firms remotely switching homes to prepay meters

A rising number of households are having their energy smart meters remotely switched to prepayment meters, the energy regulator has said.

Energy firms use the technology to swap customers who are in debt to the more costly plan without needing a warrant.

Ofgem said it had received reports of "vulnerable customers being left without power for days or even weeks".

Kelly, from South London, whose meter was switched, said: "I suddenly only had £3 on my electric until payday."

Once a smart meter is installed, it is a much simpler process for a supplier to swap the customer into prepay mode at the push of a button, rather than having to apply for a warrant and install a physical box.

Switches can either be done at the request of customers or done by the supplier as part of a debt recovery process.

Kelly, who did not want to us to use her last name, was a direct debit customer with EDF when price rises saw her bills more than double from £200 a month to more than £430.

The mother-of-two, who works part-time and receives £320 Universal Credit per month, quickly found herself about £1,000 in debt.

"I've been calling EDF on and off since January to sort it," she said. "Then I got a letter saying they would change me on to prepayment."

Kelly tried again to talk to her supplier and told the BBC that communication has been poor and notes on her case were not properly updated.

Then, in October, she simply got a text telling her that she was now on a prepayment plan. "I suddenly only had £3 on my electric until payday. I was so unhappy."

EDF told the BBC a switch to a prepayment meter was "a last resort" after extensive attempts to discuss support and agree a resolution with the customer.

A spokesperson added: "In this situation, moving a customer to pay-as-you-go will prevent them from continuing to accrue debt at an uncontrollable rate and prompt the customer to take control of their ongoing energy payments."

Citizens Advice told the BBC that so far in 2022 almost 500 people have been in contact in distress after being forcibly moved onto prepayment - a 158% increase in cases on 2021.

Rosi Avis, who heads up the Manchester Branch, said remote switching is "disconnection by the backdoor".

"If customers are unaware that they are on a pre-payment meter they might not top up and therefore they are more likely to self-disconnect from their gas or electric," she explained.

Citizens Advice predicts that 450,000 people could be forced onto a prepayment plan this winter and of those, it expects 180,000 to be made as automatic remote switches via a smart meter.

More than 152,000 households with smart meters were remotely switched to more expensive prepayment plans by their supplier last year, according to data from Ofgem.

There has been a steep rise in remote switches. Some 56,000 homes saw their electricity switched in 2020. That more than doubled to 108,000 in 2021. Some 39,000 households had their gas meter switched in 2020, that increased almost fourfold to 152,000 in 2021.

The BBC contacted suppliers for 2022 data. None would share the information, but will be reporting an update to Ofgem at the end of the year. Nonetheless, the huge rise in energy prices means it is anticipated that this trend in more remote switches has continued.

Ofgem said that 60,000 households had been switched over the past three months.

Ofgem said it was concerned about reports that some vulnerable customers were being switched to prepayment meters without full regard to their situation.

"In extreme cases reports we received suggested this had led to some vulnerable customers being left without power for days or even weeks," a spokesperson said.

"This is completely unacceptable, especially as we head into a very challenging winter."

It said customers should be told that smart meters can be switched.

Ofgem has written to all suppliers to urgently remind them of their obligations.

"Suppliers must follow the same Ofgem rules on ability to pay assessments for remote switching a smart meter to prepayment mode as they would for installing a prepayment meter under warrant," the spokesperson said.

"[We] won't hesitate to take punitive action where needed. Standards of service across the industry need to improve," they added.

The Christians Against Poverty (CAP) charity attended one of Ofgem's meetings on the matter and said that action is needed urgently.

"We are seeing people switched to a different payment type without conversations happening," said CAP's energy relationship manager Paul Walmsley. "That can be really distressing and there should be protections in place for those people."

"Suppliers should be taking a lot of due diligence with people. They should be making sure there is no vulnerability in the household. They should be making sure the customer has the ability to pay," he added.

The BBC contacted British Gas, Ovo-SSE, Scottish, EDF, Eon-Next, Shell, Octopus, Bulb, Utilita & So Energy. None were willing to share updated figures on 2022 switches. All stressed that any customers in difficulty should speak to their supplier. Shell also added that a third of their customers switched to prepayment asked to do so, because they see it as the best way to help budget and control spending.

A business that promotes smart meters, Smart Energy GB, was keen to point out that the technology has benefits. "If you already prepay for your energy, a smart meter offers several advantages over an analogue prepay meter, such as the ability to top up from home," a spokesperson said.

"Support is also easier to access - for example, the £400 Energy Bill Support Scheme credit is applied automatically for those on smart prepay with no need to redeem a voucher."

A spokesperson for the Department for Business, Energy & Industrial Strategy said: "We understand this is a difficult time for families, which is why we have put in place immediate support including the Energy Price Guarantee, which is saving the typical household around £700, in addition to providing the most vulnerable households with £1,200 each this year on top of the £400 support that households are benefitting from.

"We expect suppliers to fully comply with their obligations and welcome the steps Ofgem is taking."

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