Thousands of households to receive payouts over forced prepayment meter fitting

Poorly treated customers could be transferred thousands of pounds

Energy customers are set to receive payouts of up to £1000 and have debts written off, following revelations concerning the forced fitting of prepayment meters.

After a review by the regulator Ofgem, they found that energy suppliers switched their vulnerable customers to paying upfront after falling behind with paying their gas and electric bills.

These customers are set to receive payments starting at £40, rising to £500, depending on the severity of how they were treated by their energy provider.

Customers who faced, what Ofgem called "inappropriate installations" are eligible to receive payments up to £1000.

The problem arose two years ago, at the height of the cost of living crisis, alongside a spike in energy prices after the Russian invasion of Ukraine.

Energy firms were switching financially struggling customers to prepayment methods, without their consent.

Some people were manually switched from their smart meter to prepaid mode, others were less fortunate and had police and locksmiths enter into their homes to install a new meter manually.

After receiving a lot of backlash on the matter, Ofgem decided to suspend the forced installations and carry out a review of the practice from January 2022 to January 2023.

The review concluded that these energy suppliers "fell short of required standards" in the way they treated their customers.

However, it's important to note that the £70 million Ofgem announced they were going to distribute, will only apply to customers of 8 suppliers: Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy, and Electricity.

These eight firms have already paid out £55m in financial support, with another £5.6m to be paid out to 44,000 affected customers.

Ofgem points out that customers don't need to take action themselves, as compensation will be paid directly into the customer's accounts.

A new standard of practice is now in effect to ensure that prepaid meters are only installed with explicit consent of the customer.