Energy firms use ‘missing millions’ to help customers
Citizens Advice has secured a six million pound boost for vulnerable pre-payment meter customers.
The national charity and consumer body reveals that British Gas, EDF, E.on, Npower, Scottish Power and SSE have committed the money, which comes from pre-payment meter top-up which never reached suppliers, to be put towards helping struggling customers.
In autumn 2012 the charity uncovered that money paid by some pay as you go electricity consumers didn’t go to their supplier. Instead the payments ended up in a central pot and were not allocated to any energy firm.
As part of its Fair Play for Prepay campaign the charity has asked suppliers:
- to use all of the unallocated payments to help consumers who are struggling to pay;
- offer customers more modern ways of topping up their gas and electricity including online, over the phone and via text;
- increase the number of prepay tariffs;
- sign-up to its consumer demand.
The big six energy companies have now all agreed to make their share of the money available to struggling customers through trust funds. Each firm has received their share and has put the money into their trust fund or support scheme.
Now Citizens Advice calls on energy suppliers to commit the full £24 million of unallocated payments to helping consumers who are struggling to pay for electricity and gas.
Gillian Guy, Chief Executive of Citizens Advice, said:
“The missing millions have been sitting untouched for years. It’s great news that companies are putting this money to good use, helping consumers who are vulnerable and struggling to pay for electricity and gas. Six million pound will go some way to helping people, but there’s an opportunity for companies to go even further and commit the full £24 million pot to supporting vulnerable customers.
“Our research has shown that one in six prepayment meter customers has cut off their energy supply because of high costs, difficulty topping up or faulty meters. It’s really important firms make every effort to ensure prepay customers get the help that they need if they are struggling. Putting the millions of pounds of unallocated payments into trust funds and support schemes is a clear way of helping people.
“The old fashioned way of topping up in store is too limiting for consumers and makes it difficult for energy firms to refund customers when things go wrong. It’s time prepay customers had a more modern and convenient way to pay for their energy including online, over the phone and via mobiles.”
Energy UK’s chief executive, Lawrence Slade, said:
“This is fantastic news and yet another example of energy companies’ commitment to helping their customers.
“It is great to see this £6million added to the hundreds of thousands of pounds suppliers already spend each year to help customers in difficulty.
“Customers who are struggling to pay their energy bills should get in touch with their supplier, or contact the Home Heat Helpline 0800 33 66 99 where friendly advisors are on hand to help.”
Prepay fact file
•16 per cent of GB energy customers use prepayment meters – 10.8 million people live in homes that pay for their energy this way.
•The number of prepayment meter users is increasing – on average 2278 meters are installed every working day.
•Experience from other markets (eg mobile telecommunications), as well as customer research, suggests it’s is not unrealistic to expect up to one third of consumers will be on some form of prepayment offer when smart meters are rolled out.
•Last year 1.62 million people, one in six of all pre-payment customers, self-disconnected because of high costs, difficulty topping up or faulty meters.
•Half of those who cut off their power said they were seriously concerned about being able to afford to top up their gas or electricity meter, up by six per cent since 2010.
•Children live in half of the households that have prepayment meters.
•People who are on prepayment meters and self-disconnect are on the lowest incomes.
•Disconnections can be as little as an hour to as long as several months.
•43% of bureaux advisers referred cut-off prepayment consumers to a foodbank.
Notes to editors:
- The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
- Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014 service statistics see our quarterly publication Advice trends
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.