Consumer Scotland publishes response to Ofgem call for evidence on prepayment rules

Consumer Scotland published its response to Ofgem's call for evidence on prepayment meter (PPM) rules and protections for domestic consumers on 14 March 2023¹. The statutory body for consumers in Scotland, established by the Consumer Scotland Act 2020 and accountable to the Scottish Parliament, said it welcomed the call for evidence and wider actions such as Ofgem's Market Compliance Review².

The response states that the risk of disconnection still exists for the 421,000 consumers in Scotland using prepayment meters, as well as 4.1 million across Great Britain².

The submission sets out four key points. It says the current pause on prepayment meter installations should continue until Ofgem is confident individual suppliers comply with licence conditions; that installation under warrant, or the equivalent remote switch via a smart meter, should be explicitly a last resort in the supply licence; that Ofgem should set a more prescriptive process suppliers must follow before moving consumers to a PPM; and that vulnerability criteria should be expanded to include financial vulnerability, specific medical conditions and those who need energy for medical equipment².

The response also cites research by the Vulnerability Registration Service finding that 72% of respondents had not been asked by a service provider if they were vulnerable, despite 27% considering themselves as such and 42% exhibiting characteristics of vulnerability, and a finding that eight out of ten customers would not tell a company if they were in a potentially vulnerable situation². It reproduces case studies from Citizens Advice Scotland's Extra Help Unit, including a consumer spending £80 a week to keep her supply on, and another with £1 left on his emergency credit for gas and electricity because he had a £6.50 debt on the meter².

Why it matters for households

Prepayment meters require payment before energy is used, so a household that cannot top up can be cut off from gas or electricity. The response concerns the rules governing when suppliers can install a meter under warrant or switch a smart meter remotely into prepayment mode, and what protections apply to the households affected. Consumer Scotland's evidence indicates that prepayment meter users report more severe effects on food spending, heating, energy rationing and health than direct debit customers, and that a pause on forced installations was in place at the time of publication². The submission argues that the burden should sit with suppliers to prove no vulnerability exists before proceeding, and that a PPM should be deemed inappropriate where that cannot be demonstrated². It also notes that vulnerability can be created or worsened by having a prepayment meter, not only pre-existing².

What happens next

Consumer Scotland says it looks forward to the outcome of Ofgem's Market Compliance Review and any resulting action to support consumers currently using prepayment meters, and to future engagement with Ofgem as the prepayment meter work continues². No date for the conclusion of the call for evidence or the review is given in the published response¹.