Ofgem reveals forced PPM compensation payments

Ofgem has published details of the number of customers that have received compensation from their supplier after wrongly having a prepayment meter (PPM) installed.

The regulator made the announcement in an update on its ongoing Market Compliance Review (MCR) into involuntary PPM installations, with a further update scheduled for the end of June.

In order to identify those eligible for compensation, suppliers have been proactively reviewing customers that had a PPM installed without their permission to identify those that should not have, between 1 January 2022 and 31 January 2023.

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

British Gas is not included in the MCR nor the figures above, as it is subject to a separate investigation.

Ofgem said compensation levels may vary according to customer circumstances and the amount of harm they experienced. Furthermore, suppliers have been offering compensation via cheques, adding credit to the customer’s account, as well as writing off debt.

So far more than 150,000 involuntary PPM installations have been assessed by suppliers.

Ofgem said: “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.”

Following the major revelations that British Gas had been forcefully installing PPMs at the homes of vulnerable customers, suppliers agreed to pause their warrant activity, as well as remote switches.

Ofgem gave the green light to some suppliers to begin again earlier this year:

• Eon – restarted on 21 February 2024
• EDF – restarted on 8 January 2024
• Octopus – restarted on 8 January 2024
• Scottish Power – restarted on 8 January 2024
• Tru Energy – restarted on 21 February 2024
• Utilita – restarted on 1 March 2024
• Utility Warehouse – restarted on 26 February 2024

The regulator was however criticised for allowing forced PPM installs to resume before it published the results of its MCR.

Simon Francis, coordinator of the End Fuel Poverty Coalition, described the decision as “outrageous” and told Utility Week that it “would have made much more sense” for Ofgem to have waited for the results of the MCR before giving the green light to forced installs.