The Essential Services Commission’s Guideline 4 on explicit informed consent requirements under the Energy Retail Code of Practice is a very useful resource for energy sellers in Victoria. This article summarises the key steps energy sellers must follow to comply with their obligations to obtain explicit informed consent from customers.
What is Explicit Informed Consent?
Explicit informed consent requires the customer to clearly understand the information relevant to the transaction and purpose of their consent. The retailer must:
- Disclose all relevant information to the customer clearly, fully and adequately in plain English
- Provide the information in a manner the customer can understand
- Give the customer the chance to ask questions and clarify any aspects they are unsure about
- Obtain the consent in writing, verbally or by electronic communication generated by the customer
When Explicit Consent is Required?
The Energy Retail Code requires explicit informed consent in relation to (inter alia):
- Providing information via electronic communications
- Entering into a new contract
- Transferring to a new plan with the same retailer
- Using certain billing methods like estimation or alternative cycles
- Entering into direct debit arrangements
- Transferring the customer to a new retailer
- Deregistering life support equipment requirements
How to Obtain Explicit Informed Consent?
a. Disclose all relevant information clearly and adequately
- Use plain English and avoid complex legal jargon
- Ensure that all matters that are required to be disclosed are disclosed
- Give the customer the opportunity to ask questions and to confirm their understanding
- Read out information at an understandable pace on calls
- Make translations or interpreters available where required
- Identify the retailer and provide contact details
b. Allow the customer to clarify any aspects they are unsure about
- Pause recordings at logical intervals to allow questions
- Answer any questions or concerns raised by the customer
c. Obtain consent through writing, verbally or by electronic communication
- Record verbal consent to allow verification
- Store records for at least 2 years
- Provide customers access to consent records on request
d. Confirm customer competence to provide informed consent
- Watch for any signs of limited competence
- Transactions are void if customer was not competent
Verification and quality assurance calls
Verification processes are critical when it comes to explicit informed consent. For example, a retailer who simply accepts online sign-ups without confirming that the relevant customer had the capacity to provide consent and was in fact the customer is significantly more likely to breach the explicit informed consent obligations than those retailers who also confirm the customer’s consent via other means.
By following these steps, energy retailers can reduce the likelihood of no compliance with the explicit informed consent obligations and gain valid and informed consent from customers. Maintaining procedures to obtain and record consent provides protection in case of any disputes.