New Round of Enforcement Actions

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook

A fresh round of enforcement actions have been announced by the Essential Services Commission of Victoria (ESC). Energy sellers should review the announcements made by the ESC and ensure that they have adequate controls in place to avoid the same issues.

Explicit Informed Consent

On 26 July 2021, the ESC has announced that Simply Energy had paid penalty notices totalling $2.5 million after being issued 125 penalty notices.

The penalty notices were issued to Simply Energy after two external sales agents allegedly undertook deliberate fraud to transfer 525 gas and electricity accounts at 264 properties without any contact to obtain explicit informed consent.

Energy retailers are required to obtain explicit informed consent before transferring a customer. We’ve looked at the requirements relating to explicit informed consent in detail here and here.

Lessons: The lessons that energy sellers can take away from the Simply Energy penalties include:

  • A single ‘rouge’ sales agent can cause immense damage within a short period of time.
  • Energy retailers cannot ‘contract out’ of their obligations. In this instance, the sales agents were external door to door agents.
  • Verification processes need to be robust. In this instance, the sales agents allegedly impersonated customers consenting to the switch in phone calls.
  • Energy retailers need to independently verify that a customer has provided explicit informed consent.
  • Victorian retailers need to ensure compliance with the changes

Disconnection of Energy

On 6 August 2021, ESC announced that Origin Energy has paid $450,000 in penalties for the alleged wrongful disconnection of 349 customers following those customers being sent an SMS message that failed to inform customers about payment help.

In commenting on the enforcement action, ESC Commissioner Sitesh Bhojani said energy retailers must ensure disconnection for non-payment of a bill is a last resort.

“Energy retailers must offer a range of assistance, including flexible payments or bill deferrals and information about relief grants and energy concessions that may be available,” he said.

Between 7 February 2019 and 13 February 2020, Origin Energy allegedly wrongfully disconnected 349 customers who were behind on their bills, with many only receiving a ‘vague’ text message as a final warning.

Further, the ESC noted: “Evidence obtained by the commission showed the retailer did not satisfy the requirements of the Energy Retail Code which says retailers can only disconnect a customer for not paying a bill if, after issuing a disconnection warning notice, it uses ‘best endeavours to contact the customer’ and ‘provide(s) clear and unambiguous information about the assistance available’.”

Lessons: The lessons that energy sellers can take away from the Origin Energy penalties include:

  • Ensuring that all communications are reviewed against the applicable regulatory requirements;
  • Understanding that the detail of compliance matters and that most areas of energy retail are heavily regulated; and
  • Now is a good time to review all customer comms to ensure compliance.

More to explorer

Eureka tower Melbourne

Victorian Embedded Network ‘ban’: proposed changes to the embedded network regulatory framework in Victoria

On 11 January 2022, the expert panel appointed by the Victorian Government to review the policy position of banning embedded networks in residential settings published its final report. The recommendations, if implemented, will have a significant impact on embedded network operators in Victoria.

The report sets out the panel’s recommendations for implementing a ban and further considers how the ban should apply, or rather what changes should be made to the regulation, to legacy (existing) embedded networks.

Stock market prices

Price Comparisons under the Electricity Retail Code

On 12 January 2022, the Australian Competition and Consumer Commission (ACCC) announced that energy retailer CovaU Pty Ltd had paid $33,300 in penalties arising from three infringement notices issued for alleged contraventions of the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 (the Code).

Energy

AEMO Draft 2022 Integrated System Plan review

On 10 December 2021, the Australian Energy Market Operator (AEMO) published the Draft 2022 Integrated System Plan (ISP) (Draft ISP). This was subject to a ‘transparency review’ by the Australian Energy Regulator (AER), released 7 January 2022.  The Draft ISP is now in the consultation stages, prior to final publication in June 2022.

Leave a Reply

Your email address will not be published. Required fields are marked *