EnergyAustralia pays $80,000 in penalties

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EnergyAustralia has paid penalties totalling $80,000 for allegedly switching customers without consent.

The Australian Energy Regulator (AER) chair Clare Savage said that robust enforcement of the law is vital for building consumer trust that businesses are doing the right thing and that the explicit informed consent (EIC) obligations under the Retail Law are clear.

“Energy providers are obliged to make sure their customers are fully aware of what they are agreeing to, so their customers can make informed choices that fit their needs,” she said.

“At a time when energy affordability is an issue for a lot of households, ensuring consumers are able to shop around to find the best deal is very important.”

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Between March 5, 2018 and May 28, 2018, in relation to four customers across New South Wales and Queensland, the AER alleges that EnergyAustralia breached the EIC obligations by:

  • failing to inform customers of matters relevant to their consent, including details about the ownership of EnergyAustralia which was a matter of particular importance to a customer, and
  • making misleading representations when signing up customers, including misrepresentations about the applicable rates under a proposed plan.

As a result, EnergyAustralia has paid four infringement notices of $20,000 each, and has implemented corrective actions and commenced ongoing compliance improvement projects to prevent future breaches.

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“We have previously initiated proceedings against EnergyAustralia for similar conduct,” Ms Savage said.

“In 2015, the Federal Court ordered by consent that EnergyAustralia pay penalties of $500,000 for contravening section 38 of the National Energy Retail Law (Retail Law) for failing to obtain EIC of customers before transferring them to new energy plans.

“We will continue to monitor EnergyAustralia’s compliance with its EIC obligations,” Ms Savage said.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Retail Law. The AER can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain customer protection laws.