Transferring customers without their explicit informed consent (for more on EIC – click here) is a breach of the National Energy Retail Law (NERL) and can result in penalties. It is important for Authorised Retailers to understand the rules and regulations that apply to the transfer of customers without consent. This advice outlines the rules that apply to the transfer of customers without consent and provides recommendations for Authorised Retailers to ensure compliance.
Definition of Small Customer
A small customer is a residential customer, defined in section 3 of the NERL as customers who purchase energy principally for personal, household or domestic use at premises, or a business customer who consumes less than 100MWh of electricity annually in New South Wales and Queensland, or less than 160MWh of electricity annually in South Australia.
Obligations of Authorised Retailers
Authorised Retailers must only submit a transfer request for a customer in accordance with the terms of rule 57, after obtaining the customer’s explicit informed consent.
If a small customer contacts either their existing or new retailer and indicates that their account has been transferred to the new retailer without their explicit informed consent, the process to rectify the matter as prescribed under 57A (depending on the scenario) includes:
Scenario 1: The customer contacts the existing retailer – it is the responsibility of the existing retailer to notify the new retailer within 3 business days to demonstrate they have obtained explicit informed consent from the customer and comply with obligations under 57A(3),
Scenario 2: The customer contacts the new retailer, and within 10 business days of receiving notice, the new retailer must: provide the record of the small customer’s explicit informed consent to the customer; or if the small customer was transferred to Authorised Retailer more than 12 months before the notification under 57A (1), notify the small customer that the transfer is not void under section 41(1) of the NERL; or if it is established under section 41(2) of the NERL that explicit informed consent was not obtained for the transfer of the small customer from a retailer (the original retailer) to Authorised Retailer then, in addition to its obligations under the NERL, notify the original retailer in writing: (i) that the transfer of the small customer to the new retailer is a void transfer and the small customer is taken to have remained a customer of the original retailer despite the transfer of the customer to Authorised Retailer under the Retail Market Procedures; and (ii) of the void transfer date.
The same process explained in scenario 2 applies to scenario 1.
If the Authorised Retailer charges a small customer an early termination charge in respect of the termination of a market retail contract and it is later established that the transfer to the new retailer was a void transfer, Authorised Retailer must credit the amount of any early termination charge paid by the small customer on the first bill after the transfer back to the original retailer.
Recommendations
To ensure compliance with the rules and regulations that apply to the transfer of customers without consent, Authorised Retailers should:
- Obtain explicit informed consent from customers before submitting a transfer request.
- Have a robust quality assurance process (talk to us about Guardian)
- Notify the new retailer in writing within 3 business days of being contacted if a small customer contacts Authorised Retailer and indicates that it has been transferred to a retailer without explicit informed consent.
- Provide the record of the small customer’s explicit informed consent to the customer within 10 business days of receiving a notice from another retailer developed under section 57A(1).
- Notify the small customer that the transfer is not void under section 41(1) of the NERL if the small customer was transferred to Authorised Retailer more than 12 months before the notification under 57A (1).
- Notify the original retailer in writing if it is established under section 41(2) of the NERL that explicit informed consent was not obtained for the transfer of the small customer from a retailer (the original retailer) to Authorised Retailer.
- Credit the amount of any early termination charge paid by the small customer on the first bill after the transfer back to the original retailer if it is later established that the transfer to the new retailer was a void transfer.
It is important for Authorised Retailers to understand and comply with the rules and regulations that apply to the transfer of customers without consent. By following the recommendations outlined in this advice, Authorised Retailers can ensure they have processes and systems to manage their compliance obligations including avoiding penalties.
Contact us to discuss further.
References:
- National Energy Retail Rules – Version 35, Rule 57
- National Energy Retail Rules – Version 35, Rule 57A(1)
- National Energy Retail Rules – Version 35, Rule 57A(3)
- National Energy Retail Rules – Version 35, Rule 57A(6)
- National Energy Retail Rules – Version 35, Rule 37
- National Energy Retail Rules – Version 35, Rule 58
- National Energy Retail Law (Schedule of NERL SA Act), Section 41(5)
