Tens of thousands of energy customers are set to receive payouts of up to £1,000 each, and could see debts written off, in response to the scandal over the forced fitting of prepayment meters.
Energy companies are paying out more than £70m in compensation and financial support to customers.
It follows a review by the regulator, Ofgem, of the way suppliers switched often vulnerable customers to paying upfront, without their agreement, after they fell behind with their bills.
The scandal erupted two years ago, at the peak of the cost of living crisis, with energy prices spiking after Russia’s invasion of Ukraine.
It emerged that energy firms were switching people who were struggling to pay their bills onto prepayment methods, either by remotely changing their smart meter to prepay mode, or by entering the property to install a new meter.
There was a particular outcry when agents for British Gas were found to have forced their way into the homes of vulnerable people.
Ofgem responded by suspending all forced installations and launching a review of the practice from January 2022 to January 2023.
That review has found that suppliers “fell short of required standards” in the way they had treated customers.
However, the nearly £74m Ofgem announced was being dispersed applies only to customers at eight suppliers: Scottish Power, EDF, E.ON, Octopus, Utility Warehouse, Good Energy, Tru Energy and Ecotricity.
These firms had already disbursed £55m in financial support, Ofgem said. Another £5.6m would be paid in compensation to 40,000 affected customers.
A further £13m would be used to write off debt for customers who had had a forced meter installation.
Enforcement investigations are continuing for British Gas, Utilita and Ovo, representing tens of thousands more customers.
A new code of practice is now in place with stricter conditions that companies must meet if they want to install prepayment meters without customer consent.
The Public Accounts Committee previously warned that customers’ fears of being forcibly switched to prepayment meters were deterring them from adopting smart meters, slowing down the rollout.
The committee said consumers with traditional meters were “less interested” in having a smart one installed, and reports of bad practice among suppliers had put people off.
Ofgem has also demanded action plans from every supplier, which are being scrutinised on an ongoing basis to ensure that robust contingencies are in place to protect any customers who remain on outdated meters after the phased switch-off process begins.
The regulator’s director general of markets, Tim Jarvis, said: “Our priority has been to put things right for those who weren’t treated properly, and ensure we don’t see bad practice repeated.”
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