gmb45
15th June, 2009, 06:22 AM
Many pre-pay customers are on low incomes
Customers who use pre-payment meters have overpaid the energy companies nearly half a billion pounds over the last three years, it is being claimed.
The National Housing Federation (NHF)made the calculation using figures from Ofgem, the energy regulator.
It says higher charges paid by metered customers are in breach of EU rules and suggests clients may be entitled to claim the money back.
Around 12% of energy customers use the meters, with many on low incomes.
Even though pre-pay customers pay for their fuel in advance, the big energy firms have frequently charged them more than other households, the NHF found.
Under EU directives introduced in 2004, energy firms are only allowed to charge pre-pay meter users extra if this reflects higher collection costs.
Lawyers from the National Housing Federation claim these directives have been breached, and that the regulator Ofgem failed to stop this.
Between 2006 and 2008, they say, millions of pre-pay customers were charged well in excess of the average extra cost for installing and maintaining gas and electricity pre-pay meters, which is estimated by Ofgem as being ?87 over direct debit tariffs.
It makes me very angry because that's my money, they should never have taken it and I want my money back
Hayley Cairns
Customer
Some pre-pay meter customers have been charged up to ?500 more than those paying by online direct debits.
Federation chief executive David Orr said: "It is an absolute scandal that Ofgem allowed energy firms to overcharge customers to the tune of ?460m, and potentially breach EU rules for so many years.
"Ofgem has been asleep on the job, and it must urgently start defending the rights of ordinary people, instead of protecting the profits of big business.
"As a way of compensating pre-pay customers for the historic overcharging, Ofgem has a moral duty to go beyond the EU directives, and force the energy companies to equalise prepay meter prices with those for quarterly bills"
The National Housing Federation is now raising the possibility that customers may take action to get some money back.
Hayley Cairns has been paying for her gas with a pre-pay meter for the past four and a half years.
On average she puts ?60 on her pre-pay meter every month which amounts to about ?720 a year. Using the National Housing Federation calculation, that means she has paid an extra ?550 during that period.
She told the BBC she is furious about it.
"It makes me very angry because that's my money, they should never have taken it and I want my money back."
Energy regulator Ofgem admits customers on pre-paid meters were unjustifiably paying more, but it says it has now forced energy companies to bring prices down within EU rules.
Garry Felgate, of the Energy Retail Association, which represents energy companies, said companies had already brought down their prices in response to Ofgem requirements.
"Those prices have come down by ?300 million overall on pre-payment, so they are now at comparable prices to everyone else," he said.
Customers who use pre-payment meters have overpaid the energy companies nearly half a billion pounds over the last three years, it is being claimed.
The National Housing Federation (NHF)made the calculation using figures from Ofgem, the energy regulator.
It says higher charges paid by metered customers are in breach of EU rules and suggests clients may be entitled to claim the money back.
Around 12% of energy customers use the meters, with many on low incomes.
Even though pre-pay customers pay for their fuel in advance, the big energy firms have frequently charged them more than other households, the NHF found.
Under EU directives introduced in 2004, energy firms are only allowed to charge pre-pay meter users extra if this reflects higher collection costs.
Lawyers from the National Housing Federation claim these directives have been breached, and that the regulator Ofgem failed to stop this.
Between 2006 and 2008, they say, millions of pre-pay customers were charged well in excess of the average extra cost for installing and maintaining gas and electricity pre-pay meters, which is estimated by Ofgem as being ?87 over direct debit tariffs.
It makes me very angry because that's my money, they should never have taken it and I want my money back
Hayley Cairns
Customer
Some pre-pay meter customers have been charged up to ?500 more than those paying by online direct debits.
Federation chief executive David Orr said: "It is an absolute scandal that Ofgem allowed energy firms to overcharge customers to the tune of ?460m, and potentially breach EU rules for so many years.
"Ofgem has been asleep on the job, and it must urgently start defending the rights of ordinary people, instead of protecting the profits of big business.
"As a way of compensating pre-pay customers for the historic overcharging, Ofgem has a moral duty to go beyond the EU directives, and force the energy companies to equalise prepay meter prices with those for quarterly bills"
The National Housing Federation is now raising the possibility that customers may take action to get some money back.
Hayley Cairns has been paying for her gas with a pre-pay meter for the past four and a half years.
On average she puts ?60 on her pre-pay meter every month which amounts to about ?720 a year. Using the National Housing Federation calculation, that means she has paid an extra ?550 during that period.
She told the BBC she is furious about it.
"It makes me very angry because that's my money, they should never have taken it and I want my money back."
Energy regulator Ofgem admits customers on pre-paid meters were unjustifiably paying more, but it says it has now forced energy companies to bring prices down within EU rules.
Garry Felgate, of the Energy Retail Association, which represents energy companies, said companies had already brought down their prices in response to Ofgem requirements.
"Those prices have come down by ?300 million overall on pre-payment, so they are now at comparable prices to everyone else," he said.