Energy Guides

Reclaiming prepayment meter charges

By Becca Talbot becca.talbot@consumerchoices.co.uk

Recent figures from the National Housing Federation revealed that customers on prepayment meters may have been collectively overcharged nearly £500million over the last three years by their energy suppliers.

If you use a prepayment meter for your gas and electricity, and think that you may have been overcharged, you may be able to claim some of that money back. Here’s some more information on how… (3/7/09)

The National Housing Federation (NHF), the governing body for England’s housing associations, recently revealed that millions of “hard-up families” who use prepayment meters were collectively overcharged by £464million between 2006 and the end of last year.

The housing group is now campaigning for energy regulator Ofgem to ban the unfair prices that the energy suppliers charge their prepayment meter customers, and is working to help customers reclaim some of the money they have overpaid.

Have I been overcharged for my energy?

The research from the NHF suggests that the majority of prepayment meter customers have been charged too much for their energy at some point over the last three years.

The Federation believes this stems back to the failure of both the energy suppliers and the energy regulator to comply with an EU directive that was introduced in 2004. The legislation states that energy suppliers cannot charge prepayment customers more for their gas end electricity, unless it is to cover costs relating to the maintenance and supply of the meters.

According to fuel poverty charity National Energy Action, 5.8 million prepayment meters are in use in Britain. If you have a prepayment meter for your energy, and think you have been overcharged by your supplier, you may be able to claim back some of this money.

How much have prepayment meter customers been overcharged by?

Ofgem, the energy regulator, has calculated that the extra cost to suppliers to install and maintain prepayment meters should not be more than about £87 per year, per household.

However, recent data from the energy regulator suggests that homes with prepayment meters are being charged on average £189 a year more for their energy than customers with standard meters who are signed up to online tariffs and who pay their bills by monthly direct debit - the cheapest way to pay for your gas and electricity,

This means that customers could have been overcharged by an average of £100 a year for their energy (£189 minus the £87 average actual cost). The study by the National Housing Federation found that some prepayment meter customers paid as much as £500 more for their energy than direct debit customers during 2008 alone though.

Can I reclaim prepayment meter charges?

The process for prepayment meter customers to reclaim the money they have overpaid is not as well defined as that used to reclaim bank charges, and the campaign does not yet have the official backing of the Office of Fair Trading. This means that the process of reclaiming money is still being defined and you may not be successful – but is still worth a try, as you have nothing to lose.

The NHF believes that the more people complain and demand refunds, the more the energy suppliers and regulators will take notice. A spokesperson for the Federation said: “At the very least, taking action now will help to ensure that prepayment meter users are treated more fairly in future – and getting a refund is certainly not out of the question.

How do I reclaim prepayment meter charges?

The Housing Federation’s campaign urges prepayment meter customers to raise their concerns with the government, as well as writing to their energy supplier to demand a refund. Below are the three steps the NHF advises:

1. Write to your local MP using the NHF website
2. Write to your energy supplier using a template letter from the NHF
3. Compare energy prices to see if you could find a better deal to save you money.

You can also join the NHF’s Facebook group, which is campaigning to “end the prepayment meter rip-off.”

If you’re a prepayment meter customer and are looking to switch to a standard meter, compare prices and tariffs before switching, to make sure you get an energy deal that suits your home.