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Ofgem is calling on suppliers to abolish prepayment meter (PPM) installation and removal charges as soon as possible.
Ofgem said that although 60 percent of suppliers do not charge for installation and removal, the 40 percent that do charge up to £180 and £160 respectively to do so. It is calling for their complete removal ahead of an autumn consultation.
The regulator said it would work with suppliers to remove these potential barriers to switching, through which customers could save up to £300 a year if they switch payment method from PPM to direct debit.
Ofgem said currently 15 percent of all British customers are on a PPM, with only four fixed tariffs available to them.
Ofgem partner Philip Cullum said: “Ofgem is concerned that charges and costs for using a PPM fall on those least able to afford them. That’s why we want to remove barriers, deliver greater protections and offer more choice for prepayment customers to ensure they’re able to find the best possible deals.”
Both Citizens Advice and Which? have supported the move, saying Ofgem is “right” to call for a scrap of the charges, with Which? calling on energy suppliers to go further and do more to “make their best offers available to all customers regardless of how they pay.”
Citizens Advice’s chief executive Gillian Guy said: “Prepay energy consumers pay more for a second rate service. Too many prepay customers can also feel locked out of the best deals by unfair charges.
“Some suppliers are helping customers with fairer tariffs and new ways of managing energy use, but others are getting worse.”
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