Tech & Biz

Energy firms 'profit from poor'

by Jordan Yerman | November 15, 2008 at 07:50 am

71 views | 7 Recommendations | 2 comments

Consumer Focus states that UK energy suppliers are making their biggest profits from poorer customers, who must used prepaid metering in order to get gas and electricity to their homes.

When I first moved to London, I was one of these customers: the deposit for monthly billing was too much for me to afford, so I had to use one of those key meters. Indeed, my rate was nearly double what it would have been had I been able to use monthly billing. "Predatory" was the term I used to describe it at the time, and it still is.

Firms make about half a billion pounds a year in extra charges from prepayment meters, Consumer Focus estimates.
About 1,000 prepayment meters a day are being installed in households where people have got into debt over their energy bills, it says.
Industry body the Energy Retail Association says many people like the meters because they help them budget.
But the industry is now under pressure from the regulator, Ofgem, to cut the prepayment tariffs.

After weeks of disagreement E.ON got a court warrant to fit a prepayment meter, and - while she was on holiday - removed the locks to gain access to her flat.
When Ms Naji returned from holiday, she thought she had been burgled.

Also, it was a total pain in the butt to climb up and remove the key from the little box above the front door, then carry it to the nearest off-license to top it up.

In the Westcountry, a friend of mine had a water heater that was (I kid you not) coin-operated, and only took the old 50p coins, which he and his housemates had to hoard.