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British Gas has decided to stop backdating price rises for token prepayment meter users - a practice that has left many of these customers with huge energy debts through no fault of their own.
Around a million electricity consumers use token energy meters which need to be individually reset every time the price goes up. Households on low incomes often use prepayment meters to budget.
But energy companies are known to be slow to reset (recalibrate) these meters. Some companies then try to recover the debt that has grown in the meantime - a situation made worse by the deluge of price rises since 2003. So, consumers who have budgeted carefully using prepayment meters, not only have to deal with a huge increase in the amount they pay, but also with debts of hundreds of pounds that they were not expecting.
British Gas has now joined EDF Energy and Scottish and Southern Energy in saying it will not apply a debt when it recalibrates a meter. It is also replacing token meters with new electronic pre-payment meters.
Teresa Perchard of Citizens Advice makes the point that backdating price rises has a devastating effect on poor households.
"Prepayment meter customers already get a raw deal, and our evidence shows that some of the most vulnerable customers are ending up owing hundreds of pounds, exacerbating the hardship they face," she adds.
04 December 2006 © Moneyextra.com
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