Ofgem proposes measures for debt recovery and consumer protection

Energy regulator Ofgem has this week (July 3) proposed a series of measures to help vulnerable customers – including a price cap on the warrant of force-fitted prepayment meters.

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This proposal is one of many steps the regulator wants to take to ensure fairness across the market including the introduction of a safeguard tariff for vulnerable consumers to protect them from overpaying.


Other measures include trialling a new ‘Check Your Energy Deal’ online switching service, to help customers who have been on poor value standard variable tariffs for three years or more to find cheaper deals.


The proposal on the warrant of imposed pre-pay meters, which is now out to consultation, has been amended following responses to a draft consultation in September 2016. The energy watchdog aims to introduce the new rule to protect household consumers in the process of having prepayment meters force-fitted, under warrant, for debt recovery purposes.


It proposes a price cap of £150 for the warrant suppliers charge consumers for the force-fitting of prepayment metres – which is currently around £210 according to Ofgem research.


Ofgem explained how companies are expected to use warrants as a last resort, but believe they can do more to avoid warrants where possible, including better identification of consumers in vulnerable situations throughout the debt recovery process.


Ofgem said it doesn’t want any domestic energy consumer to face disproportionate or inappropriate actions or costs throughout the debt recovery process. It thinks consumers, including those in vulnerable situations, need specific protection against warrant usage and costs.


Ofgem has also considered introducing a proportionality principle, covering the costs and actions of suppliers, for all customers in the debt recovery process.


The intention here is to ensure suppliers take action and levy charges that are proportionate in all cases where they seek to recover debt from consumers.


Ofgem has also proposed a “sunset clause” which means rules on warrant-related activities won’t apply from the date that smart meters are rolled out in December 2020.


It said the rollout will reduce the need for the physical installation of prepayment metres, because a smart meter can be switched to prepayment mode remotely. Ofgem said this will reduce the need for regulation in this area.


Responses to this prepay consultation must be submitted to Ofgem by August 29. The regulator expects to publish its final consultation later this year and implement the changes two months after publication.


To view the consultation click here.


In October this year, Credit Strategy will hold its Household Conference gathering credit, risk, collections and compliance experts from a wide spectrum of the UK’s utilities and telecoms providers. The deadline for free entries for our Utilities & Telecoms Awards, also taking place in October, will end this Friday (July 7).

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