MSE News: Ofgem wants fees scrapped for prepaid energy meters

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Ofgem calls for energy suppliers to scrap charges of up to £360 to install and remove prepayment meters...
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  • Joyful
    Joyful Posts: 2,426 Forumite
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    Interesting that it's all the cheaper companies. People can't have it both ways. If they go for a smaller company for cheapness then those can't afford not to charge for changing the meters.
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  • davidgmmafan
    davidgmmafan Posts: 1,459 Forumite
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    It's been said many times but it is worth saying again. There ARE extra costs associated with prepayment meters. I 'm not sure why the regulator doesn't understand this and spreads mis-information.

    I think fees for installing a prepayment meter are a bit much, unless it is on a warrant and the customer has not engaged with the supplier with regards to a debt.

    Slightly off topic but the rates for prepayment meters are the same as a quarterly receipt of bill customer and have been for some time.
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  • tripled
    tripled Posts: 2,879 Forumite
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    So an energy company has to arrange for a qualified engineer to go to the property (not cheap) and fit an expensive bit of kit (they are more expensive than normal meters). In many cases the old meter will probably have to be scrapped at a loss as there is little demand for them (due to the drive for "smart meters"). They tend to cost more to administer - more likely to go wrong and need an engineer to go out and more likely to have customer contact support for lost payment card/key (again sometimes requiring an engineer to go out and add emergency credit).

    The energy companies have little hope of recouping all those costs, because a shop is taking comission every time the customer buys energy, eating into the margin. Generally the users of prepayment meters are tenants and at some point, either due to a change of mind or a change of occupancy, the energy company will get a call asking to take out the meter and change it back. Out they come again, sending an engineer, taking back this expensive bit of kit which then sits in a warehouse until it gets scrapped or someone else phones up wanting a prepay meter and off the engineer goes again.

    Sure, granny Smith who's been in her council house 20 years and has a prepayment meter because she prefers it, keeps plenty of credit on it and never loses her payment card and seldom rings the gas/electric "board" will be a profitable customer. But in reality most aren't, and so the energy suppliers aren't keen on them.

    Forcing all suppliers to offer free prepayment meters will push up costs which will have to be recouped through raising tariffs. Then everyone will be paying more to subsidise them, which I object to. Many services charge a surcharge if you don't use their most economical payment method, the most common being surcharges if you use a credit card or if you don't pay by direct debit.

    If people can't get their meter changed free by their present supplier, pay the price or change to a more expensive supplier who will do it for nothing. Or, if you're really crafty, change to the company who will do it for free, then switch again to the cheapest provider. Simples.
  • undaunted
    undaunted Posts: 1,870 Forumite
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    Ofgem wanting doesn't necessarily mean much. Years ago they wanted the transfer objection removed. Energy co.s presumably said they didn't as it's never happened.

    As I recall there would have to be a change in the MRA for Ofgem to be able to force any change(s) - some "regulator". Consulting is far from the same as regulating!
  • Butterfly_Brain
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    This is good news
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  • cosmovid
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    In my experience Scottish Power and SSE are still charging for the removal of prepay meters. Only when the customers have health issues are the charges waived. Not sure if they are telling OFGEM something different from regular customers...
  • Bark01
    Bark01 Posts: 882 Forumite
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    It's been said many times but it is worth saying again. There ARE extra costs associated with prepayment meters. I 'm not sure why the regulator doesn't understand this and spreads mis-information.


    There are extra costs such as the third party pay point infrastructure but there are also savings such as a minimal bad debt risk. The reduction in bad debt risk is a greater saving than the extra costs, but not by much. Prepay should be slightly cheaper than credit but more expensive than DD.
  • C_Mababejive
    C_Mababejive Posts: 11,657 Forumite
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    I think OFGEM are just showboating unless they are advocating that credit customers cross subsidise prepayment customers by smearing prepayment administration costs across everyone elses bills? Maybe OFGEM should take a look at themselves for a change. A commitee of fat cats being paid fortunes and having lovely gold star civil service pensions.
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  • [Deleted User]
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    cosmovid wrote: »
    In my experience Scottish Power and SSE are still charging for the removal of prepay meters. Only when the customers have health issues are the charges waived. Not sure if they are telling OFGEM something different from regular customers...
    Scottish Power certainly are charging.....a lot . Two couples desparate to rid themselves of their money sucking prepays both told me yesterday that this supplier was demanding a hefty £430 to remove both prepay meters. Another couple quoted £160 for the gas prepay alone. These are all meters that they had inherited when moving in recently
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