Ofgem Investigation into PayPoint

An Ofgem investigation into PayPoint has resulted in admittance that PayPoint breached competition laws.

PayPoint has agreed to remove exclusivity clauses from its pre-pay customer contracts with energy suppliers, as well as pay £12.5 million to the regulator.

Additionally, PayPoint has agreed to overhaul its services as a result of the four-year investigation.

 

Who is PayPoint?

Established in 1996, PayPoint works with more than 60,000 retailers, offering a system to enable consumers to make convenient payments ranging from gas and electric to a TV licence, in-store and online.

PayPoint, a trusted and well-known brand, partner with a number of energy suppliers and currently have 28,000 outlets across the UK.

Households can top-up pre-pay meters either in-store or via the website and mobile App.

 

Ofgem Investigation

Ofgem’s investigation, which began in August 2017, considered whether PayPoint had abused its power by writing exclusivity clauses into contracts with energy suppliers and retailers.

This may have impeded competition and consumer choice, of which many are from vulnerable households.

It’s also likely to have had real-world implications for housing associations and social landlords as they and their residents negotiate the processing of RTI codes to reset historic prepayment meters in their properties.

RTI codes are eight-digit numbers that residents take to their local PayPoint outlet to get a new key to get the power back on in their homes.

 

Results of Investigation

 

PayPoint has agreed to:

  • Remove exclusivity concerning energy pre-payment services, with energy suppliers and retailers, from current and future contracts and any future contracts during the next five years
  • Offer contracts to energy suppliers that will allow retailers to use other payment providers and their equipment to process prepayment meter credits
  • Donate £12.5 million to Ofgem’s Energy Industry Voluntary Redress Scheme - This allocates funds to charities and housing associations across England, Scotland and Wales, to be used to support vulnerable households and help projects such as carbon emissions reduction

 

About Energy Angels

Wolverhampton-based Energy Angels make housing associations and social landlord’s substantial savings each year through reduced energy costs and time savings, as well as support them in their own carbon reduction goals

Any housing associations and social landlords serious about reducing their energy and administration costs should access our void energy management team.

Energy Angels work closely with our housing partners to ensure smart meters are installed in empty properties. If the whole nation got a smart meter, we could save the same amount of energy as it takes to power every household in Aberdeen, Cardiff and Manchester for a year.

Help is available to manage residents' future energy usage and costs and for all void properties, Energy Angels provide a viable renewable energy tariff option in partnership with OVO Energy.

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