Energy companies overcharging prepay customers £millions

29 September 2008 / by Rachael Stiles
UK consumers who use prepay energy meters are being overcharged by millions of pounds a year for their fuel, according to the watchdog Consumer Focus.

Super watchdog Consumer Focus, formed by the amalgamation of the National Consumer Council, Energywatch and Postwatch, has found that the 5.9million Britons who have pre-payment meters in their homes are paying over the odds for their gas and electricity and should be reimbursed.

Customers with pre-payment meters (PPMs) have been systematically 'ripped off' for years, paying an average £244 a year more for their household fuel than those with the most competitive energy deal, research revealed.

The energy companies are collecting £700million a year more as a result of the disparity, Consumer Focus says, with the UK's biggest energy supplier, British Gas, charging its prepay customers £539 a year more than those who are on its cheapest tariff.

Chief executive of Consumer Focus, Ed Mayo, highlights that it is often those on the lowest incomes that have a prepaid meter installed in order to help them to budget the household finances and manage their fuel bills, and that they are being put at a further disadvantage as a result of unfair treatment from the energy providers.

"People on the lowest incomes have been overcharged millions of pounds for many years" he said. "In this case people have been ripped off and I think they should be able to claim back the money they have been overcharged."

While the Government's new consumer organisation, launched this week, does not have the authority to make the gas and electricity providers stop the practice of overcharging their prepay customers, it can put pressure to do so on the UK's energy industry regulator, Ofgem.

"Natural justice dictates that they should get their money back." Mr Mayo added.

© Fair Investment Company Ltd