Pre-pay meter users "overcharged"

By Sunil Peck

Millions of disabled consumers could have been overcharged for their gas and electricity by energy companies, a housing group has claimed.

The National Housing Federation (NHF) says that six million users of pre-pay meters were overcharged by nearly £500 million between 2006 and 2008.

The federation says that 2 million of those people who could have been overcharged are disabled.

Under EU directives introduced in 2004, energy companies can charge pre-pay meter users extra if the amount reflects the cost of installing and maintaining the meter.

The NHF says that the average cost of installing and maintaining a pre-pay meter is £87. But it says that some pre-pay customers paid up to £500 more than customers on direct debit tariffs.

The NHF chief executive David Orr said that the energy regulator should stick up for consumers instead of defending the interests of the energy companies.

He said: "It is an absolute scandal that Ofgem allowed energy firms to overcharge customers, and potentially breach EU rules for so many years."

An Ofgem spokeswoman admitted that some pre-pay customers had been overcharged by energy companies and added: "The main energy suppliers responded late last year by removing some £96 million from the charges paid by prepayment meter users."

She said that new obligations would be in place in the summer to address what she called "undue price differences".

The NHF has information on its website about who may have grounds to reclaim money from the energy companies. It is also preparing a template letter which will be available to download and send to energy companies to request a rebate.

*www.housing.org.uk