The Poor Pay More

Following up an earlier post we see from the BBC that energy companies have been accused by an industry watchdog of exploiting some of the poorest people in society.

Customers with pre-payment meters are paying hundreds of pounds more for electricity and gas than those with access to the cheapest tariffs . Customers on the meters are charged an average of £195 more a year than those paying by direct debit . In some cases, customers using meters have been found to pay as much as £304 more a year. There are 3.5 million electricity and 2.2 million gas pre-payment meters in Britain. Some 580,000 pre-payment meters were installed in 2006. Energywatch claims that 63% were installed by companies to recover debts, which would limit the ability of those households to switch to cheaper suppliers or payment methods.

"That they should ramp up the rates and exploit those with no access to alternative payment methods is morally bankrupt," said Energywatch chief executive of Allan Asher.

According to Energywatch, the industry is making conservatively close to £300 million a year in revenues from customers on pre-payment meters.