Wednesday 14 September 2016

Ofgem proposes capping prepayment warrant charges

Ofgem proposes capping prepayment warrant charges

Ofgem is proposing to cap charges for installing prepayment meters (PPMs) under warrant for consumers in debt.

It also proposes banning PPM warrant installation charges for the most vulnerable customers.

When customers are in debt, one option is for their supplier to install a PPM under warrant, which would be a last resort for recovering debt or to resolve situations where consumers can’t or won’t engage to agree a resolution.

Under current regulations, suppliers can charge warrant costs back to affected customers, which could include court costs ranging from £200 to £900.

Ofgem’s statistics reveal customers faced an average bill of £400 for having their PPM installed under warrant last year, risking pushing them into more debt.

The regulator proposes capping the limit on charges at £100 or £105.

Rachel Fletcher, Ofgem’s Senior Partner for consumers and competition said: “It’s deeply unfair that struggling customers get hit with high warrant costs when they’re already grappling with debt, doubly penalising them.

“Ofgem’s role is to protect every consumer, including the most vulnerable. Suppliers need to help customers manage their debts.  Suppliers need to ensure that PPMs are only installed under warrant as an absolute last resort. Where they are needed, our proposals will protect customers by limiting PPM warrant charges for all customers and removing them for the most vulnerable.”

The news comes as the regulator outlined its approach to protecting prepayment customers following the competition watchdog's recommendations after a two-year investigation into the energy market.

Written by

Bruna Pinhoni

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