Compensation For Involuntary Installation Of Prepayment Meters, 1 January 2022 To 31 January 2023

4th April 2024

Last year, Ofgem announced a Market Compliance Review (MCR) into involuntary prepayment meter practices. Our initial focus was to prevent wrongful installations of involuntary prepayment meters. In November 2023, new rules came into effect that have been moved into the standard gas and electricity licences. All energy suppliers have to follow them.

Suppliers agreed to pause involuntary installations and remote switches and work with us throughout the review. They have been proactively reviewing customers that had a prepayment meter installed without their permission to identify customers that should not have, between 1 January 2022 and 31 January 2023. The purpose of this is to identify those eligible for compensation.

Initial information from energy suppliers show that 1,502 customers have received compensation, totalling £342,450. Suppliers are planning more payments of around £200,000 for 1,000 more customers.

The amounts paid to customers vary across different suppliers. Suppliers have also compensated customers in various ways, including sending cheques, adding credit to the customer's account, and writing off debt that customers had built up. British Gas is not included in the Market Compliance Review nor the figures above, as it is subject to a separate investigation.

This review is continuing, and over 150,000 involuntary prepayment meter installations have been assessed by suppliers so far. Suppliers have used a range of ways to find affected customers, including looking at customer accounts with known vulnerabilities or where complaints have been made. Suppliers have also contacted all prepayment meter customers to ensure this method of payment remains appropriate.

Compensation levels may vary based on consumer’s individual circumstances and the harm they experienced. We want to ensure there is consistency in the approaches taken across suppliers, and that all affected customers are appropriately compensated. This includes making sure suppliers identify all customers who have had a prepayment meter installed when they should not, and that those customers are compensated fairly. So, these figures are not necessarily the final amounts that will be paid.

We will publish another update on the Market Compliance Review by the end of June 2024. The update will include figures on the number of customers who have had compensation, the amount paid and our ongoing work with suppliers, consumer groups and the Ombudsman to identify affected customers.

Claim compensation
If a customer thinks their supplier installed a prepayment meter or switched their smart meter to prepayment meter mode when they should not have, they may be entitled to compensation. Customers should contact their supplier, explain their circumstances, and make a complaint.

For help making a complaint, consumers can contact Citizens Advice and Advice Direct Scotland. If customers need extra support, the complaint may be referred to Extra Help Unit and Energy Ombudsman. We are working with each agency to ensure that we are taking a joined-up approach.