Ofgem said it will review the checks and balances energy firms implement when placing customers on pre-payment meters, warning that legal action could be taken.
In a blog, the watchdog's chief executive Jonathan Brearly said he was concerned about the “sharp growth in households struggling to pay their bills being switched over to pre-payment meters, sometimes without their even knowing about it, leaving them without heating”.
It comes after Business Secretary Grant Shapps demanded that energy suppliers stop forcing vulnerable households to switch to pre-payment meters. He also said he would "name and shame" the worst suppliers of this practice.
Read more: Morrisons makes major change to hundreds of products that may impact weekly shop
According to Mr Brearley, Ofgem performed a review last year of firms' processes for dealing with vulnerable customers which resulted in legal order to improve. As part of the review, one company agreed to pay into Ofgem's compensation fund.
However, he insists that the Mr Shapps and Citizens Advice are "right to remain concerned". Mr Brearley wrote: “The numbers of forced installation of pre-payment meters is extremely high. It is simply not acceptable that vulnerable customers are left in the dark and cold in winter.
“Therefore, today, we will take forward a further, more detailed assessment to check whether plans have led to improvements. This review will focus specifically on self-disconnections, remote switching and forced installations, and the checks and balances companies have around any decision to put a customer on a pre-payment meter.
“If we find that they have not taken due care in this process, we will take further legal action against them.”
Pre-payment meters are generally more expensive than paying for energy bills via direct debit for customers. Research from Citizens advice revealed that 3.2 million people ran out of credit last year because they were unable to top-up their meters.
Read next:
Boots giving away free makeup to shoppers who spend £15 online
Aldi shoppers rave about ‘gorgeous’ candle that’s £275 cheaper than Jo Malone
Shoppers love ‘warm’ £8 Amazon buy that’s ‘tons better’ than M&S
Shoppers can get ‘unlimited’ coffee for £12.50 in January with money-saving deal
Sign up to our Happy New You newsletter and make a fresh start in 2023
