Energy regulator tells firms to enforce ban on top-up charges

Many retailers surcharge pay-as-you-go customers

 

The energy regulator has called on gas and electricity providers to stop surcharging pay-as-you-go customers.

Some 150,000 people use pre-pay meters. Many shops which sell credit for these meters apply surcharges of between 20 and 50 cent to individual top-ups, even though contracts forbid this.

A recent survey of shops in one Dublin area by the Money Advice and Budgeting Service found that the majority of the shops surcharged.

In recent days, the Commission for Energy Regulation wrote to utility providers about the impact of these charges on customers, particularly those who received meters due to financial hardship.

It said contracts with third parties such as Payzone and PayPoint – which administer pay-as-you-go services in shops – stipulate that customers should not pay any charges above the face value of gas or electricity. The letter, seen by The Irish Times, states: “We are requesting suppliers and Bord Gáis Networks to actively seek enforcement of the current terms and conditions between third-party providers and retailers prohibiting the charging of top-ups.

“In addition, the commission requests that this principle applies to all current and future contracts with third-party providers, such that they obligate providers to prohibit retailers from charging customers amounts above the face value of the electricity or gas vended.”

Airtricity, Electric Ireland and Bord Gáis Energy have publicly stated that they do not agree with surcharges.

In the gas market, the electronic payments firm Payzone is required to monitor retailers and remove shops that charge customers more than the face value of gas.

Similarly, in the electricity market suppliers have negotiated with third parties such as PayPoint and Payzone for top-up services.

The letter states that it has been assured by both firms that top-up services will be removed from retailers who persist in applying surcharges.

However, RGData, which represents independent shops, convenience stores, and supermarkets, has said utility companies have made major cost savings by outsourcing payment services to local retailers.

In the absence of surcharges, it argues that many local shops will end up offering these services at a loss.

It has called on the ESB and Bord Gáis to properly reimburse retailers for providing pay-as-you-go services .

The Society of St Vincent de Paul, which has spent millions of euro helping vulnerable people pay energy bills, welcomed the move by the commission. It said top-up charges placed further pressure on many people who were making the effort to budget properly and avoid falling into arrears with their energy bills.

“These are essential services and retailers have signed up to contracts which forbid surcharges,” a spokesman said.

“By applying these charges, people struggling on lower incomes are then expected to pay more for essential goods and services.”

PayPoint said recently that the practice of charging extra has already resulted in one shop being dropped from providing top-up services.

It said a breach of contract occurs, whether or not a retailer has given notice to customers beforehand of additional charges.