Families forced to pay energy giants £7m in ‘penalty’ fees

The three energy giants are able to make customers in debt pay excess sums for their fuel, as each company continues to charge those on prepay meters a premium of up to £39 a year more for their gas compared to those paying by quarterly bill.

The Federation fears the practice of charging excess fees to those in debt could plunge thousands of families further into financial trouble, and has called on the three companies to scrap their controversial prepay tariffs. E.on, npower and Scottish Power have already removed the prepay premium following intense pressure from ministers and campaign groups.

Nearly 400,0000 homes in the UK currently have gas prepay meters installed in their homes to pay off debts to their energy companies.

An estimated 261,000 of those are believed to be customers of British Gas, SSE and EDF, who penalise those in debt by forcing them onto their prepay meter tariffs, which attract easily the highest rates in the market for gas.

Families forced onto meters by their energy companies also miss out on the opportunity of switching to a cheaper supplier until their debts are paid off in full.

Federation chief executive David Orr said: "The big energy companies have every right to install prepay meters in people’s homes if they fail to pay their bills.

"But it’s totally unacceptable for them to stick the boot into hard up families by switching them onto their very highest gas tariffs.

"Our liberalised energy market has brought us to this crazy situation whereby three big energy companies are free to continue to charge £7million in extra charges when the other three have dropped the prepay premium altogether.

"Ministers should take urgent action to stop this unfair situation now. There can be no justification whatsoever for charging families in debt the very highest tariffs on the market for their gas.

"The big six energy companies have all scrapped their prepay tariffs for electricity but British Gas, SSE and Scottish Power still charge a premium for those using gas prepay meters. British Gas charge £39 more, SSE £30 and EDF £9.

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