Martin Lewis' MSE issues alert as thousands of households due up to £1,000

Martin Lewis’ MoneySavingExpert.com has issued an alert as tens of thousands of households who were forced onto an prepayment meter could be due up to £1,000 compensation.

The energy regulator has announced that to 40,000 customers in total, following a review. The suppliers will also write off a further £13million of energy debt.

The payments start at £40 or £60, rising to £250, £500 and £1,000. explains: "How much you'll get depends on how you were treated during this process, though Ofgem says very few will get the full £1,000, which will be paid to those who shouldn't have been switched at all."

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The eight energy firms that are issuing the payments are: Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy and Ecotricity.

It comes after Ofgem launched an investigation into often vulnerable customers being switched to prepayment meters after they fell behind on bills between January 1, 2022 to January 31, 2023.

Ofgem has said the compensation will be paid automatically into energy accounts and added that some customers will have already been contacted by their supplier.

The energy firms at the centre of the investigation have already paid out £55million in financial support. It comes after new stricter rules on forced prepayment meter installations were introduced by Ofgem in 2023, following an investigation by The Times which revealed how debt collectors had.

Tim Jarvis, director-general of markets for Ofgem, said: “This has been one of the most detailed reviews of supplier practices in Ofgem’s history, looking at tens of thousands of cases.

“It has taken time, but our priority has been to put things right for those who weren’t treated properly, and ensure we don’t see bad practice repeated.

“While the number of cases where a prepayment meter was wrongfully installed is relatively low compared to the total number of PPM customers, one case is one too many.

“Our review also found wider issues with the processes suppliers had in place, which is why we’ve put in place clearer, tougher rules to protect customers in vulnerable situations, and I’m pleased that from today suppliers will be applying our compensation framework for those customers affected and have also committed to further support such as debt write-off.

“We have made our expectations clear to suppliers on how those customers who were treated poorly should be compensated. They have, and continue to, work closely and collaboratively with us to make sure their processes are robust and that their customers are properly supported.

“We know that PPMs can be an effective tool in helping customers manage their costs and debt. However, customers must always be treated fairly and compassionately, and we are confident that the changes we have made are a significant step to ensure that happens.”