Energy companies ordered to pay out £70 million in compensation over forced meter fittings
28 May 2025, 05:30 | Updated: 28 May 2025, 12:56
Energy companies are paying out more £70 million in compensation and financial support to customers, with tens of thousands to receive up to £1,000 each.
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The payouts could result in debts being written off in response to the scandal over the forced fitting of prepayment meters.
It follows a review by the regulator, Ofgem, of the way suppliers switched often vulnerable customers to paying upfront, without their agreement, after they fell behind with their bills.
Energy UK, representing energy firms, said suppliers had worked hard to "put things right", following the intervention by Ofgem.
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Eligible customers could receive payments starting at £40, rising to £250 or £500, depending on the way they were treated by their energy supplier, or where processes were not followed adequately.
The highest payouts of £1,000 were for customers who had faced "inappropriate installation", Ofgem said.
Some may already have received help, or have been contacted by their energy supplier.
Ofgem has said if this is not the case, customers did not need to take any action as compensation would be paid directly into customer accounts.
"Our priority has been to put things right for those who weren't treated properly, and ensure we don't see bad practice repeated," said Tim Jarvis, Ofgem's director general of markets.
The scandal erupted two years ago, at the peak of the cost of living crisis, with energy prices spiking after Russia's invasion of Ukraine.
It emerged that energy firms were switching people who were struggling to pay their bills onto prepayment methods, either by remotely changing their smart meter to prepay mode, or by entering the property to install a new meter.
Ofgem responded by suspending all forced installations and launching a review of the practice from January 2022 to January 2023.
That review has found that suppliers "fell short of required standards" in the way they had treated customers.
However, the nearly £74m Ofgem announced was being dispersed applies only to customers at eight suppliers: Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy, and Ecotricity.
These firms had already disbursed £55m in financial support, Ofgem said. Another £5.6m would be paid in compensation to 40,000 affected customers. A further £13m would be used to write off debt for customers who had had a forced meter installation.
Energy Secretary Ed Miliband said: "Justice is finally being delivered to many of the families, lots of them vulnerable, who were affected by the scandal of energy suppliers wrongly forcibly installing pre-payment meters.
"The government has campaigned tirelessly on this issue and are pleased to see the level of compensation increase to £18.6 million, up from £420,000 under the previous government.
"Consumers must come first, which is why we are reforming the energy market to stamp out bad practice and make it easier to access proper redress when things go wrong, through our comprehensive review of Ofgem.
"This increased compensation package is a good start, and we will be announcing further reforms in the weeks ahead as we deliver our Plan for Change."
