Prepayment meters (PPMs) are an important payment option, helping millions of households to control their spending on energy and avoid getting into debt. They are also an effective way for suppliers to limit bad debt. But they are not suitable for everyone, and we have seen some evidence of unacceptable supplier practices.
In January 2023, we announced a package of work focused on PPM. As well as investigating reports of poor supplier practice, we are also reviewing relevant licence conditions and guidance to consider what else they should cover to further protect consumers, particularly vulnerable consumers.
Following our Call for Evidence in February, we have launched a Code of Practice, which has been agreed with suppliers.
The Code sets out strengthened protections for the most vulnerable customers for whom PPM may not be a safe option, alongside standards for those customers who are currently on PPM or may be moved to PPM.
It works in tandem with existing licence rules and guidance, and its goals are:
- to ensure that customers, especially vulnerable customers, are protected and that PPMs are only used where safe and reasonably practicable;
- to recognise that PPM is a valid payment option for many customers, and should be retained as an option where safe and reasonably practicable for the customer; and
- to deliver high standards and protections for all PPM customers, for example through the promotion of smart PPM.
The Code sets out how suppliers should deal with a customer who is facing an involuntary PPM. Every household is different and suppliers should individually assess the suitability of each household for involuntary PPM.
Building on extensive engagement we have already had with suppliers and consumer groups, we will formally consult on translating the Code into licence rules and/or guidance.