It states
EWOV’s identification and reporting of systemic issues plays an important part in reducing the potential for problems or practices to affect more customers. Our recent casework has highlighted several systemic issues related to energy marketing practices. With a view to curtailing the impact of these practices on customers, the Ombudsman has written to the Australian Competition and Consumer Commission (ACCC).The report also identifies systemic issues identified through EWOV’s case handling.
The issues have arisen in both door-to-door and telephone sales, with customers complaining of misleading and high-pressure sales tactics and transfer of their account to a different energy retailer without their consent:
Over 2016 and 2017, EWOV received 15 complaints from customers complaining that they’d received an excessive number of telephone sales calls from a small retailer. The retailer’s explanation was that this was the result of poor practices by two different sales companies it had engaged, and the practices were subsequently stopped. (SI/2016/50)
Over 2016 and 2017, 17 customers complained about a small retailer’s misleading door-to-door marketing and related transfers without consent. The retailer’s explanation was that the complaints related to conduct by multiple sales companies. It said one sales agent was dismissed and agents were retrained. (SI/2016/72)
In early 2018, several customers complained about transfers without consent following telephone marketing calls from a small retailer. The retailer’s explanation was that its sales company had obtained explicit informed consent, but some customers seemed to be unaware they were agreeing to transfer. It said it had since modified the consent procedure to include a customer ID check, which would make it clearer that the customer was agreeing to a transfer. (SI/2018/15)
EWOV is currently investigating a potential systemic issue (SI/2018/26) relating to door-to-door sales. A different small retailer’s practices have prompted a customer complaint about transfer without consent.
Poor customer communications during unplanned outage event
During a weather-related unplanned outage in January 2018, around 14,000 customers were affected by problems with the local electricity distributor’s website, faults and emergency lines, and notifications. The distributor acknowledged the problems. It said it was using what went wrong to help it plan for future events. This included making changes to its website and SMS messaging system. SI/2018/7
Transfer complaints follow telephony problems
An energy retailer linked a spike in transfer complaints to the systemic telephony issues EWOV had investigated previously (SI/2018/10). It said some customers had changed their mind about switching, and others didn’t think they’d entered into a formal contract because they weren’t asked for identification at sign-up. The retailer maintained that its sales company had obtained explicit informed consent for the account transfers, but some customers still seemed to be unaware they were agreeing to switch retailer. It said it had since modified its consent procedure to include a customer ID check, to make this clearer. SI/2018/15
Backbilling further than code allows
Through EWOV’s case work, we identified that some customers had been backbilled for longer than allowed under the Energy Retail Code. The energy retailer advised that it had since changed its billing system processes to generate reports identifying bills for periods of over nine months. It now assesses whether a credit should be applied to reduce that billing to nine months. It said it had also updated the guidelines its employees follow in these cases. The retailer said it had provided affected customers with a credit of charges outside the billing time limit. SI/2016/74
Contract unclear on application of off-peak rates
EWOV’s case work revealed that a customer had been billed on peak rates for all usage, despite an off- peak rate being listed on the welcome pack he was sent. The retailer responded that strict observance to network tariffs is not mandatory. It said that, under the Energy Retail Code, a retailer is required to notify the customer of all applicable prices and tariffs as part of their contract. It maintained it had complied with this in its paperwork, which listed peak, off-peak and solar tariffs. While the energy retailer appeared to have complied with relevant laws and codes, we communicated EWOV’s assessment that its contract paperwork wasn’t clear about when off-peak rates were applicable. SI/2017/11
Connection delays due to industrial action
Industrial action, by way of work bans by its contractors’ union, resulted in disruption to an electricity distributor’s new connections. Once the union lifted the bans, delayed connections were completed. Under the Electricity Distribution Code, a distributor must connect a new connection on an agreed date or within 10 business days of the request. Where it doesn’t meet this timeframe, the distributor must make a Guaranteed Service Level (GSL) payment of $70 for each day it is late, up to a maximum of $350. The energy distributor advised that it would make GSL payments to affected customers. SI/2017/25
New connection service orders rejected
EWOV’s case handling highlighted that an energy distributor’s system was rejecting new connection service orders. The distributor advised that recent changes by the Australian Energy Regulator meant that new connections now needed three service orders. It said the rejections related to service orders submitted by one energy retailer. In consultation with the retailer, it had made a system change to address the problem. SI/2018/24
Application of credit default listings
Several cases to EWOV highlighted that an energy retailer had applied credit default listings after customers defaulted on their agreed payment arrangements, but hadn’t sent the customers the required notices. Advice to EWOV from the Office of the Australian Information Commissioner was that this was incorrect. The energy retailer agreed that the information it provides to its customers about its default listing process could be clearer, including the possible consequences if the customer defaults on a payment arrangement. The retailer undertook to amend its payment arrangement letters to include an additional notification statement. SI/2018/8
