Ofgem extends forced prepayment meter instalment ban

Energy companies will not be able to restart forced prepayment meter installations at the end of March, the energy regulator's boss has said.

Ofgem had originally applied a temporary ban on installing prepayment meters under warrant until 31 March.

Jonathan Brearley was "deeply concerned" by firms forcing prepayment installations on vulnerable customers.

The ban will lift "only when and if" firms follow Ofgem's new code of practice, he said.

Mr Brearley wrote to suppliers in November "to make sure they were clear on our rules".

Speaking to MPs at a joint hearing of the Business and Justice select committees, he said the ban would be lifted "only when and if" companies began acting in accordance with Ofgem's new code of practice.

He announced there had been a further compliance review launched in January that was looking at the systems, processes and outcomes for customers subject to prepayment meter installations.

The energy regulator was now "checking to see if we need to tighten those rules" and is working with industry on a new code of practice that it expects to be in place by the end of March.

The Ofgem boss said companies "don't need to wait for our review to conclude" and that they "need to fix things now."

Mr Brearley also confirmed that in the build-up to the press reports on prepayment meter installations, Ofgem had been having extensive conversations with consumer groups who "were warning us about behaviour across the industry".

He called for service standards to be increased across the board, citing one example at E.On, where 50% of incoming calls are dropped before they're answered.

He said: "If you're vulnerable, how do you tell your company you're vulnerable if you can't get through on the phone?"

Earlier in the session, Chris O'Shea, the chief executive of British Gas-owner Centrica, said he had only become aware of potential breaches of regulations from press reports.

Last month it emerged that debt agents acting for British Gas had broken into vulnerable people's homes to force-fit meters, and that courts had been waving through energy firm applications to forcibly install meters.

Chancellor Jeremy Hunt is expected to announce a plan in his Spring Budget on Wednesday aimed at bringing prepayment energy charges in line with customers who pay by direct debit.

He has said it is "clearly unfair that those on prepayment meters pay more than others".

More than four million struggling households are set to save £45 a year on energy bills from 1 July.

Households which have prepayment meters are typically vulnerable or on low incomes.

But they pay more because energy firms pass on the costs of managing the meters.