Powergen charge me 130.00 a year for key meter

[yaffsimone1]

Last November i had a key meter installed for my electric. I had an unpaid bill of about 200 pounds and unless i wanted to go to court the only other option was getting a key meter to pay it off. This was fine with me becuase i admitedly am nightmare for putting money aside for quarterly bills etc.

However what i didnt know is Powergen charge me 130.00 per year for this meter. I only found because i was checking the charges on the meter. You put in the key in press a few buttons and it tells you how much the meter has been set to to pay off the outstanding debt. and how much is outstanding. Mine was set to 2.00 per week. Yet on checking my charge was 4.50 per week on phoning Powergen i was advised the extra 2.50 was the charge for having the meter.

It is just me that thinks this stinks. I dont earn alot of money and neither do many others, thats why we have key meters so why on earth are the suppliers charging us, surely they should be helping us not ripping us off!

[ATD]

Very contentious one this…

Morally I don’t agree that an additional standing charge should be applied where a prepayment meter is being used as a debt recovery device. If we could afford an extra £2.50 per week then it’s likely that there wouldn’t have been that much (if any debt) in the first place, so it does put an unnecessary strain on weekly budgets.

Was this standing charge not pointed out to you when you agreed to have the meter? If not, then it should have been.

On the business side of things, well I can see why there are these charges. After all there are the initial costs of having the meter installed, then there are the ongoing costs of the totally separate payment systems run by a 3rd party company (Siemens I think?) which will cost the supplier more. So by the same reasoning that if paying by DD makes it cheaper for the supplier to administer the account, and therefore gets a discounted tariff, if the prepayment meter makes it more costly to run the account, should not some of those costs be paid be the customer…?

[yaffsimone1]

I have this meter as a way of controlling my bills but it has become more of a burden

It is also a known fact that prepayment meters have a higher tariff than people that pay quartlery, so add this to the weekely standing charge that makes rather a large sum on money.

Ok so maybe the standing charge is accepted given your points that customers should pay for the extra services it take to have one of these meters.

So what is the explanation for the increased tariff charges?? Surely not a penalty for being poor!!!

[ATD]

Originally Posted by yaffsimone1

So what is the explanation for the increased tariff charges?? Surely not a penalty for being poor!!!

Well we'd all like to think not wouldn't we!

You are right though, much as I can see the business "need" behind the standing charge, it is totally wrong when applied to a debt recovery situation.

One thing that puzzles me, your Debt Recovery Rate being set at £2.00 is really low. I worked in the industry a little over 2 years ago, and at that time (unless one of the non profit debt organisations was involved) the lowest recovery rate would be £2.75 per week as this was the same as that which would be made if the customer went down the road of direct payments from benefits.

It might be worth making a formal complaint to your supplier that you were never advised of the additional standing charge, and expected to be paying usage +£2.00 per week, where in fact you are paying usage +£4.50 per week - i.e. that they mislead you into accepting this payment method. If they don't respond you could always ask Energywatch to look at it. I don't honestly know if it would hold water, but it's worth a try.

They could have left your normal meter in place and set you up on a weekly scheme of usage +£4.50, and because your wouldn't have had the prepayment meter the tariff would be cheaper, making the £4.50 more affordable.

[yaffsimone1]

Originally Posted by ATD

Well we'd all like to think not wouldn't we!

You are right though, much as I can see the business "need" behind the standing charge, it is totally wrong when applied to a debt recovery situation.

One thing that puzzles me, your Debt Recovery Rate being set at £2.00 is really low. I worked in the industry a little over 2 years ago, and at that time (unless one of the non profit debt organisations was involved) the lowest recovery rate would be £2.75 per week as this was the same as that which would be made if the customer went down the road of direct payments from benefits.

It might be worth making a formal complaint to your supplier that you were never advised of the additional standing charge, and expected to be paying usage +£2.00 per week, where in fact you are paying usage +£4.50 per week - i.e. that they mislead you into accepting this payment method. If they don't respond you could always ask Energywatch to look at it. I don't honestly know if it would hold water, but it's worth a try.

They could have left your normal meter in place and set you up on a weekly scheme of usage +£4.50, and because your wouldn't have had the prepayment meter the tariff would be cheaper, making the £4.50 more affordable.

It was more than 2.00 but i got a letter not long after the meter was fitted and was advised the rate would be 2.00 per week, i wasn't going to argue.

I could have left the old meter in place but that meant paying by the outstanding debt off by direct debit, something i refused to do.

I had been happily paying the debt off every month via a payment card and never missed a payment, but then it seems Powergen got fed up and said it's either a payment meter or court.

I think the whole thing stinks, charging poorer households via increased tariffs and standing charges is not helping the situation.

[ATD]

Originally Posted by yaffsimone1

I had been happily paying the debt off every month via a payment card and never missed a payment, but then it seems Powergen got fed up and said it's either a payment meter or court.

They have at best mislead you with that statement, the following is from the Energywatch website regarding what a supplier must do before applying for a warrant:

Offer you a wide range of ways to pay the money owed:

These should include paying by cash and cheque monthly or fortnightly, direct debit, with a prepayment meter or Fuel Direct . When the supplier makes an arrangement for you to pay back any debt, they must not make you pay back any more than you can afford each week, fortnight or month.



I'd certainly put in a complaint to the supplier, pointing out that they have not been honest in the information supplied to you and that you are considering a complaint to Energywatch if you can not come to a mutually acceptable solution. (Might be worth ringing Energywatch first just to get their opinion on the situation)

[nottslad]

with prepayment meters, there is a standing charge industrywide. E.on currently charge 14p per day standing charge.

Credit meter customers also have to pay the standing charge, it is just presented in a different way and broken down into primary and secondary units. 900 units of electricity per year (225 per quarter) are charged at a higher rate- this covers what was previously the standing charge.

With regard to E.ON 'getting fed up' with your payment plan, it would only have been canceled if you had underpaid, missed a payment or your payment had come through late. Not offering to reset the payment plan would be down to the payment history on your account - if you have had failed arrangements in the past, then it may not be the best option for you, hence why a dd or pre payment meter was offered.

Fuel Direct is offered in circumstances where customers on benefits cannot physically have a prepayment meter, either due to the meter's location or a disability which would prevent the customer being able to get to a shop to vend the meter

[ozzywizard]

Honestly, you will get no were with this claim. the tarrif is the same for all prepay customers, but your unit price is lower on a prepayment meter than a quartly tarriff, I am with Powergen (EON) and on a key prepay meter by choice because it works out cheaper for me.