Energy: taming the predators

By Richard North - June 30, 2023

Despite the excitement over the water “crisis”, energy costs remain an issue, even if the effects have dropped down the media agenda and scarcely feature in routine news coverage, even as people are being forced to raid their savings to pay their bills.

However, there has been a brief resurgence of interest over a move by Ofgem on pre-payment meters, with a decision by the regulator to turn the voluntary code of practice on “involuntary” prepayment meter installations into a mandatory code.

This was picked up initially by iNews, which has closely followed this issue, highlighting the downside of this development. The final agreement of a code – which has been out for consultation – will means that the de facto ban on force-fitting pre-payment meters in place since February will be removed ahead of winter.

The paper is not particularly impressed with Ofgem’s move, having campaigners warn that strengthened protections will mainly benefit only a small group of people, the over-85s, who represent only a fraction of billpayers.

These campaigners take the view that the only way to protect customers is for a complete ban on forced installation, noting that moves are currently taking place in Parliament to amend the Energy Bill to stop customers already on prepayment meters from being disconnected – which would rather seem to defeat the object of having these devices.

One of the campaigners identified is Simon Francis, co-ordinator of the End Fuel Poverty Coalition. He argues for beefing up the rules but is not confident that will have much effect.

“In reality”, he says, the only solution is for the Government to bring in a ban on forced prepayment meters through the Energy Bill and introduce proposals put forward by the Money Advice Service and others to help people repay energy debt”.

For what it’s worth, I would completely support the idea of a ban on forced fitting, even though in arguments played out through newspaper comment threads, many favour the status quo.

These often assert that energy companies must be allowed the means to recover debt, even though water companies are not permitted to use such devices and cannot cut off domestic suppliers – yet they still have multiple options for debt recovery.

The essential problem, of course, is that energy prices are too high but, even without that problem, the ability of suppliers to seek warrants enabling them to force-fit meters gives them too much power in the event of a dispute.

In this, it is not unknown for suppliers to overcharge customers and enforce payment by a series of threats, even when they are not entitled to the sums they are demanding, bullying customers into paying up first and then going through a labyrinthine complaints procedure in order to recover the overpayments.

This has certainly been my experience with EDF, which seems to believe it is entitled to issue fictional bills based on wildly inflated estimates, expecting customers then to supply actual meter readings in the hope of a corrected bill for the next payment period.

The simple and entirely reasonable expedient of withholding payment until the billing has been sorted out is met with a volley of threats, including the prospect of a compulsory pre-payment meter.

Although the suppliers are supposed – under the new code of practice – to arrange a “welfare visit” before any warrant is sought, their latest ploy is to charge customers for such visits. They then use the charge as a threat, pressurising customers in debt to permit “voluntary” fitting to avoid incurring the costs involved in a visit.

In short, there seems to be no system which the regulator can devise which the suppliers will not attempt to manipulate to their own advantage, perverting the intention of measures designed to protect vulnerable (or any) customers,

Not all is entirely lost, though, as there exists in statute S.40 of the Administration of Justice Act, which deals specifically with the unlawful harassment of debtors.

Demands for payment which, “in respect of their frequency or the manner or occasion of making any such demand”, are calculated to subject the debtor or members of his family or household to “alarm, distress or humiliation”, become criminal offences.

The value of this provision is that there is no escape into corporate liability. Individuals making the demands become personally liable. Furthermore, Section 40(2) of the Act holds that a person may be guilty of an offence “if he concerts with others” in the taking of such action as might constitute harassment, “notwithstanding that his own course of conduct does not by itself amount to harassment”.

Thus, little apparatchiks, lending their names to computer-generated threatening letters, could well find themselves in breach of the Act and subject to a criminal prosecution.

This would seem all the more relevant with the iNews story being updated by The Times, which seems to indicate that the original voluntary code on force-fitting meters is not only to be made mandatory but also to be strengthened.

Ofgem, we are told, has announced a statutory consultation on its plans to rewrite suppliers’ licence conditions, which extends the ban on the compulsory fitting of prepayment meters to cover all homes with children under five.

The regulator has also had feedback that the ban should include anyone over 75 – ten years younger than those covered in their initially proposed changes. It is also being suggested that the prohibitions should extend to homes with children under 16 and those living a significant distance from a top-up retailer with no personal transport.

What the suppliers will then need to address is their habit of spraying out indiscriminate threats to all late-payers, regardless of their status. Threatening exempted households with force-fitted prepayment meters – which they should know cannot be lawfully pursued – would make it very easy to claim harassment, leading to criminal proceedings.

This, though, has wider application as both suppliers licensing conditions and provisions relating to the issuing of entry warrants preclude enforcement action where there is a “genuine dispute” over the amounts being charged.

This is where we came in, as suppliers have a habit of going though the motions in dealing with complaints, failing to address the issues and then unilaterally declaring the complaint “resolved” whence they commence enforcement action – often lying to magistrates when seeking entry warrants.

Bearing in mind that pressure is driving millions of people into the grip of loan sharks, with dire effects, the honeyed assurances of suppliers that they will treat debtors fairly cannot be relied upon.

Given the opportunity, energy suppliers are unprincipled thieves, with little in practice to distinguish them from criminal loan sharks.

And while Ofgem has belatedly proposed action against generators “who have been attempting to gain excessive financial benefit at a cost to consumers”, some players have already succeeded in walking away with hundreds of millions of pounds.

This is something to remember when arguments are raised about giving suppliers a “fair chance” to recover debt. They will abuse any system that has the slightest of loopholes. Consumers need the maximum of protection against these predators.