Lanarkshire MSP welcomes payouts over forced prepayment meter fitting
A total of £74million is being paid out by eight energy firms. This includes Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy and Ecotricity.
A Lanarkshire MSP has welcomed the news that thousands of energy customers are due to receive payouts of up to £1,000 each over the forced fitting of prepayment meters.
A total of £74million is being paid out by eight energy firms. This includes Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy and Ecotricity.
It comes after energy regulator Ofgem launched an investigation into often vulnerable customers being switched to prepayment meters after they fell behind on bills.
Ofgem's Market Compliance Review (MCR) required suppliers to examine their practices of involuntary PPM installation, including both meters that were installed under warrant and smart meters that were remotely switched to prepayment mode.
At least 40,000 customers are expected to benefit from the new measures following a review carried out by the energy regulator.
Motherwell and Wishaw MSP Clare Adamson said: 'I am glad to see some compensation for forced installations. I repeatedly raised cases from constituents with Ofgem and energy companies.
'Some companies dismissed the practice, and others said it was only used as a last resort. But my team and I have helped many people facing a range of unfair billing practices including forced installations.
'Ofgem's review has shown that multiple companies fell short of their obligations, and it was people in Motherwell and Wishaw, and struggling households across the country, that were at the sharp end of those failures.
'We still need to see further and faster regulatory action. My constituents face a raft of unfair energy practices: historical energy debt; so-called 'self-disconnection'; errors in debt calculation; and the unjust standing charge.
'Even the availability of the cheapest tariffs is often down to payment method and postcode. This disproportionately impacts the people on low incomes and drives fuel poverty.
'We need stronger regulatory enforcement across the energy sector so that my constituents, and people across Scotland, are not penalised by unfair practices.
'While there is good exploratory work in Scotland on a long-overdue social tariff, energy policy is reserved to Westminster.
'I welcome Ofgem's review, and today's announcement, but it is a small part of the system. The UK energy market is rife with inequity and Labour inaction on these longstanding problems is costing people in every community.'
Energy suppliers can no longer forcibly install a prepay meter on the highest risk customers, including households where someone is over the age of 75, those with children under the age of two, and households where someone has a severe health condition.
Dhara Vyas, chief executive of Energy UK, which represents energy firms, said: 'Involuntary installations have been a last - but necessary - resort for cases where repeated attempts to address debt with the customer through other means have been unsuccessful.
'It's bad for customers to fall further and further into arrears, and bad debt ultimately drives up the prices that is paid by all customers.'
UK Energy Secretary Ed Miliband said: 'Justice is finally being delivered to many of the families, lots of them vulnerable, who were affected by the scandal of energy suppliers wrongly forcibly installing pre-payment meters.
'The government has campaigned tirelessly on this issue and are pleased to see the level of compensation increase to £18.6 million, up from £420,000 under the previous government.
'Consumers must come first, which is why we are reforming the energy market to stamp out bad practice and make it easier to access proper redress when things go wrong, through our comprehensive review of Ofgem.
'This increased compensation package is a good start, and we will be announcing further reforms in the weeks ahead as we deliver our Plan for Change.'
It comes after it was revealed that energy bills will go down again this summer. The Ofgem energy price cap is being reduced by seven per cent - taking the typical annual bill from £1,849 to £1,720.
The price cap for someone paying by pre-payment meter is falling from £1,803 a year to £1,672, and the yearly charge for someone who pays on receipt of bill is going down from £1,969 to £1,855.
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Organisations such as Citizens Advice Scotland have long-opposed the practice of forced installations even prior to it catching headlines in 2022, and raised particular concerns around safeguards in place for vulnerable a 62-year-old cleaner from Hamilton, told the BBC she remains affected to this day by having a prepayment meter forced into her home in 2015."I was a single mother, working-part time on minimum wage, and came in from work one day right before Christmas to see an envelope with new keys in it," she said. 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Distressing cases As of 2024, Ofgem has introduced rules which means companies cannot force-fit meters if an occupant of the house is over 75 with no other support, is under two years old, needs energy for health reasons, or suffers from a chronic or terminal Vyas, chief executive of Energy UK, which represents energy firms, said suppliers had been working closely with Ofgem to meet the regulator's requirements, but said there were instances where forced fittings were Advice Scotland director of impact David Hilferty said the compensation scheme is welcome said: "We have always opposed forced installations as they take away people's choice, pushing them to pay money upfront which they often can't afford."Our network has seen many distressing cases over the years of people who have been forced to disconnect their heating supply or go into debt as a result of this, so it's right that they should be compensated."What's important now is that suppliers deliver this compensation quickly and do the right thing for those who have experienced unnecessary harm."
