Poor hit hardest by token meter back charges - Kramer

7.20.00am GMT Mon 15th Jan 2007

The Liberal Democrats have released research which reveals that electricity companies are gaining up to £91 million a year from some of the poorest households, through back charging on token meters.

The charges occur when electricity companies recalibrate meters to reflect rising energy prices. However, the recalibrations happen so infrequently, that households get hit with back charges of up to £800 each.

Commenting, Liberal Democrat Shadow Trade and Industry Secretary, Susan Kramer MP said:

"I am appalled that so many vulnerable customers are being hit with these charges, due to the incompetence and brutal money grabbing of certain energy companies.

"I have written today to Npower, Powergen and Scottish Power/MANWEB calling on them to end the practice of backdating charges.

"These companies should now drop this iniquitous practice otherwise Ofgem must step in to force them to.

"Energy prices have risen 56% in two and a half years. It is a disgrace that these companies can take virtually as long as they like to update a customer's meter, and then have the nerve to pursue the arrears.

"Electricity customers on a token meter are amongst the most vulnerable users. In many cases they have chosen this option specifically to budget effectively for their energy bills. The last thing they need is to be hit with sudden unexpected demands."

The estimated average debt for a British gas customer as a result of back charging was £120. Source: http://www.energywatch.org.uk/media/news/show_release.asp?article_id=998.

Applying this average debt to the 760,000 customers still on token meters, the approximate debt is £91 million.

Energywatch have been campaigning on this issue for some time. Their main success has been to persuade British Gas to stop the practice. A short briefing on the topic is available at http://www.energywatch.org.uk/uploads/energywatch_and_Citizens_Advice_Briefing_on_the_Problems_with_Token_Prepayment_Meters.pdf.

According to Energywatch there are 760,000 customers of Npower, Powergen and Scottish Power/MANWEB who are on token meters.