Rise in energy firms remotely switching homes to prepay meters (BBC)

mmmmikey

mr_stripey said:

are prepayment customers buying energy at a higher rate than the standard tariff? Or is it just more expensive because they are paying down debt on the account?


 

Where a prepayment customer has a smart meter, they can actually be paying less than the standard tariff now with some energy companies in some regions. i.e. a PAYG can be the cheapest way to buy energy. For example, with EDF in the East Midlands on the SVR you pay 33.02p/kWh for electricity by Direct Debit or 32.07p/kWh if you have a PAYG smart meter.

(EDIT I should have included the standing charge here which is 5p/day more expensive for PAYG - so if you are very a low user it could be more expensive. Doesn't really change the underlying point, just adding this edit for balance)

The BBC article, in my view, lacks balance. Take Kelly for example.

1. In the old days, before smart meters, it is quite possible that she would have found herself in much deeper in debt before anyone realised and took steps to help her, because the energy company may not have realised until an annual meter reading was taken.

2. In the old days, the process would have involved swapping out the credit meter for a prepayment meter. As well as paying off the debt, Kelly would have been paying more for energy to allow the energy companies to recover the cost of the meter swap.

3. In the old days, Kelly would have had court costs added to her bill, pushing her further into debt.

4. In the old days, there would have been a delay associated with changing the meter and going through the courts, with Kelly running up her debt further while it was all sorted out.

Of course there must be checks and balances in place to ensure that the energy companies act fairly and responsibly. And there must be a mechanism for redress if the energy companies fail. Both those things are already there and it does seem to me appropriate that they should be under constant review.

The real issue here is that energy prices have escalated to the point where many more people ar likely to find themselves struggling with debt and needing help for all kinds of different reasons. For the reasons outlined above, it is my view that smart meters actually make helping people out of the nightmare hole of spiralling debt easier, not harder.

And of course, if Kelly had been paying for her energy with a PAYG smart meter, she wouldn't have found herself in this position in the first place.

MattMattMattUK

matelodave said:

Reading the BBC article about "Kelly" who's managed to ramp up over £1000 in debt - there's no way that she'll ever repay that AND keep her lights on at the same time.

At least with a prepay, she'll be able to have leccy and possibly (although unlikely) pay some of the arrears back. In the end its the rest of us who end up paying her bill. 

As with most stories, it would be better if the whole story came out to find out what really happened because it would have taken a fair amount of effort to get over £1000 in debt unless you don't pay anything.

You cannot just keep allowing people to use as much as they like without having some sort of control. You aren't allowed to go an fill your car up without paying, not take stuff off the shelves in Tesco without paying so why allow people to do it with energy and then not expect something to be done about it.

I really doubt that energy companies arbitrarily swap people over without trying to come to some arrangements with the customer, but for some people, it's probably the only way the company can limit their losses.

In the end, taking energy without paying for it is really theft.

As with all of these stories the detail is always left out as if it was supplied people's sympathy, if it were there in the first place would evaporate almost instantly. Often in the cases in the news people have been using very significant amounts of energy, not cutting back and wilfully or negligently underpaying for many months, sometimes years, whilst running up debts. 

There is a core amount of energy costs that are almost unavoidable, the standing charges and a base line of a fridge and cooking, but often these people seem to be well above that level, £200 pcm, or £430 pcm, the amounts from the article are certainly well above those levels. 

pochase

Switching to prepaid is no disconnection, you just have to pay for the energy you are using, and a small amount to pay back a debt.

So if it really happens due to an error and not because you are unable to pay for your energy it is an inconvenience, but not a disconnection.

As mentioned before there is a long process before an energy supplier can put somebody onto a  prepaid meter. 

I have not seen a single case in this forum where somebody claims they have been switched to prepaid out of the blue without any reason or information. You are claiming it could happen, without any evidence that it has happened or will happen on a big scale.

MattMattMattUK

mr_stripey said:

are prepayment customers buying energy at a higher rate than the standard tariff? Or is it just more expensive because they are paying down debt on the account?

At the moment pre-payment is actually cheaper than Direct Debit in every billing region of the UK.

MattMattMattUK

Deleted_User said:

bristolleedsfan said:

Deleted_User said:

mr_stripey said:

are prepayment customers buying energy at a higher rate than the standard tariff? Or is it just more expensive because they are paying down debt on the account?


 

It's more the case that DD is discounted. DD budget puts large sums of money in their coffers.

Depending on usage 5p per day more SC. lower unit rate might be hardly any difference for electricity.

Most regions cheaper economy 7 night hours via smart pre-pay with EDF than direct debit

https://www.edfenergy.com/sites/default/files/government_energy_price_guarantee_prices._standard_variable_deemed_and_welcome._credit_meters.pdf?

Yet the BBC article says that people are being remotely pushed on to more expensive pre payment tariffs. Which is pretty outrageous given that the reason for doing it is because the person is struggling to pay their bills. 

The pre-payment tariffs are actually cheaper than the Direct Debit tariffs and have been for some time, the BBC however for some reason still loves to incorrectly report that they are not. 

MattMattMattUK

Deleted_User said:

MattMattMattUK said:

mr_stripey said:

are prepayment customers buying energy at a higher rate than the standard tariff? Or is it just more expensive because they are paying down debt on the account?

At the moment pre-payment is actually cheaper than Direct Debit in every billing region of the UK.

Read the  BBC article. The energy companies are re remotely switching people onto MORE COSTLY prepayment tariffs. 

I have read the article, it is wrong. They are switching them to prepayment tariffs, at the moment prepayment tariffs, fixed by the government under the EPG, are cheaper than Direct Debit.

Deleted_User said:

Where is the sense on putting someone in debt onto a more expensive tariff when there's a cheaper tariff available? 

It is not more expensive, but ignoring that for the moment the reason those in debt are moved to prepayment is so that they cannot get further into debt.

Deleted_User said:
Especially without a court order or any transparent process.

The process is fully transparent, if you get into debt and to not pay it off your future usage will be on a prepayment basis and your debt will need to be paid off, often at an incredibly low rate. A court order is a red herring, that was only previously required because the provider needed to obtain physical access to the premises to change the meter, that is no longer required and is irrelevant. 

MattMattMattUK

Deleted_User said:

pochase said:

Switching to prepaid is no disconnection, you just have to pay for the energy you are using, and a small amount to pay back a debt.

So if it really happens due to an error and not because you are unable to pay for your energy it is an inconvenience, but not a disconnection.

As mentioned before there is a long process before an energy supplier can put somebody onto a  prepaid meter. 

I have not seen a single case in this forum where somebody claims they have been switched to prepaid out of the blue without any reason or information. You are claiming it could happen, without any evidence that it has happened or will happen on a big scale.

I think you need to take a look at what thread you're posting on and read the opening post!  It's the BBC reporting that it IS happening on a wide scale. I am not claiming it could happen. The BBC and Citizens Advice etc are claiming it HAS happened - on a big scale 

You are deliberately mis-reading/misinterpreting people's comments. The BBC are reporting that people are being moved to pre-payment, they are not claiming that is happening "out of the blue" or "without any reason", but it is happening because people are running up and contemning to run up debt, rather than cutting back usage. 

pochase

Deleted_User said:

pochase said:

Switching to prepaid is no disconnection, you just have to pay for the energy you are using, and a small amount to pay back a debt.

So if it really happens due to an error and not because you are unable to pay for your energy it is an inconvenience, but not a disconnection.

As mentioned before there is a long process before an energy supplier can put somebody onto a  prepaid meter. 

I have not seen a single case in this forum where somebody claims they have been switched to prepaid out of the blue without any reason or information. You are claiming it could happen, without any evidence that it has happened or will happen on a big scale.

I think you need to take a look at what thread you're posting on and read the opening post!  It's the BBC reporting that it IS happening on a wide scale. I am not claiming it could happen. The BBC and Citizens Advice etc are claiming it HAS happened - on a big scale 

I never said it is not happening for people who are in debt. That was always the case that people were put onto prepaid when they ran up debt and they were unable to pay for it, even running up further debt. 

You were the one saying it will happen to people out of the blue without any justification. 

mr_stripey

Thanks for the individual responses to my question about whether pre pay was more expensive. 

I thought it would be very unjust if pre pay customers were having to pay more per "unit" or whatever than the standard tariff, but it seems that isn't the case.

[Deleted User]

mr_stripey said:

Thanks for the individual responses to my question about whether pre pay was more expensive. 

I thought it would be very unjust if pre pay customers were having to pay more per "unit" or whatever than the standard tariff, but it seems that isn't the case.

According to the BBC it IS the case for people that are having their smart meters switched remotely.