For the next six weeks, the energy watchdog has ordered suppliers to stop installing forced prepayment meters.
Energy providers were instructed to stop remote transfers and forced installations of prepayment meters by Ofgem until the end of March 2023 in a letter that was delivered to them on Wednesday.
According to Ofgem, all domestic suppliers have consented to do this.
The regulator will hold consultations regarding prepayment meter usage by businesses and any potential rule changes.
The scope and schedule of its Market Compliance Review on prepayment meter warrant installations and remote mode switching will be updated, and it will be published the following week, on February 21.
After it was discovered that British Gas agents had broken into vulnerable people's homes to install meters, energy companies suspended forced meter installations.
Chris O'Shea, the CEO of Centrica, which owns British Gas, told the BBC following The Times' publication of the story: "It is completely unacceptable. ".
The energy crisis is not an excuse for unacceptably rude behavior toward any customer, especially those in precarious situations, according to Ofgem. ".
In addition to reviewing the use of court warrants to enter the homes of customers who are in arrears, it asked suppliers to halt installations.
Prepayment meter installation by force will stop, according to British Gas, at least through the winter. The letter sent on Wednesday makes it clear that the suspension is in effect until the spring.
The letter reveals that during a meeting last week, Ofgem asked suppliers to stop forcing installations.
In order to avoid any misunderstanding, it was made clear that: "This includes ceasing installation by warrant, ceasing the remote mode switch of smart meters to pre-payment without the customer's explicit consent, and ceasing new applications to court for installation warrants - unless theft is suspected. ".
If prepayment meters couldn't be installed, some suppliers warned, unrecoverable debts might increase, according to Ofgem.
Suppliers claimed that would raise their expenses, which might result in higher bills for other customers.
According to the regulator, it is carefully examining how supplier costs are impacted by customer debt in order to "determine what action we need to take.".
Prepayment meters are used by more than four million households in the UK. The current laws are as follows.
- Energy usage is pre-paid by customers, either through an account or a top-up card. Credit is available for emergencies.
- Compared to direct debit, the cost of energy per unit is higher because of the expenses suppliers must bear. It may be the only choice available to those who are already in debt to a supplier.
- Some customers who don't pay their bills on time may be switched to prepayment, either remotely using a smart meter or in person using a court order.
- Before installing a prepayment meter, suppliers are required to have explored all other options. They shouldn't do this for customers who are more susceptible, such as the elderly or families with young children.
Following Ofgem's consultation, which will involve speaking with energy providers, consumer groups, and charities, they may be altered to take future use of pre-payment meters into account as well as "the current exceptional circumstances."
