Sunday, 5 August 2012

Making progress on pre-payment meters

Consumer Focus has published a report, ‘Making Progress’ detailing the significant changes the main six suppliers have made to their policies and practice to meet the five key principles. In particular, identify and engaging PPM customers, with the aim of removing or minimising consumer detriment. The report can be found here.

PPMs are currently used by 6.8 million consumers in Great Britain to pay for their energy (4m for electricity & 2.8m for gas), and whilst the public image of PPMs can be seen as negative, Consumer Focus has been working with energy suppliers to make sure that this consumers using PPMs are getting the best deal.

For many consumers, PPMs offer a simple and controllable way to pay for their energy, ensuring they don’t get into debt or fall behind in their bills. For others, who have been put onto PPM to pay off existing debt, they give people a manageable way to pay off their debt in planned instalments. Many people also find themselves living in housing that has a PPM already installed, and are unable to move to change their meter.

We have already seen a move in the costs of PPMs, back from 2009, where PPMs were the most expensive way of paying, to the situation now, where tariffs are comparable and in many cases cheaper than standard “quarterly cash or cheque” consumers.

However, for everyone living with PPMs, it is essential that they still get the best deal, good customer service and all the rights and expectations that all other energy consumers have.

In 2010, Consumer Focus undertook research into PPMs, Cutting back, cutting down, cutting off – Self-disconnection among prepayment meter users, which sought to understand the extent of self-rationing and self-disconnection among PPM users who may be disadvantaged due to their method of payment for energy. The research identified various barriers faced by consumers, including the need for alternative forms of topping up, ensuring the appropriate technology is in place and addressing the lack of information from suppliers.

Following this report, we approached energy suppliers, as well as regulators and other consumer groups to put together a forward plan for improving the PPM market.

Consumer Focus introduced the ‘Five Key Principles’ which were a step towards providing better service for PPM customers, improving the way prepayment works, providing extra support for vulnerable consumers and encouraging better communication between suppliers and prepay users. We are pleased to have found that there have been large strides following our intervention, and the report welcomes the six main energy suppliers all having made significant changes to policies and practice to embed and achieve the five key principles.

However, we still hope there can be more improvement, especially in the areas of offering greater choice, new technology, and more proactive communication. We would also urge a better understanding of who their PPM customers are, and what needs they may have.

We will continue to work with the industry to raise standards, and will ensure that parliamentarians are kept informed for the changes in a market that many of your most vulnerable constituents find themselves in.

If you have any further questions, or would like a more in-depth briefing about the report, please contact dhara.vyas@consumerfocus.org.uk.

Many thanks,

James Court
Policy Manager
0207 799 7932 /