The Morrison Government has announced a crackdown on what it calls “sneaky late payment fees” charged by energy retailers to customers who have failed to meet discount conditions.
While there are already rules in place to prevent large late payment fees being handed to customers, a lot of consumers sign up to energy providers who provide sizeable and highly conditional discounts to consumers that pay on time, which can be as high as 45 per cent of the power bill.
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The Australian Competition and Consumer Commission found in its inquiry into the energy market that one in four customers failed to meet the conditions to receive their discount.
This figure increased to nearly 60 per cent for customers in financial hardship.
The Minister for Energy Angus Taylor said in a statement, this can mean for an average household that misses one payment due date per year can pay anywhere up to $1,000 more in New South Wales, $600 more in South Australia and $500 more in Queensland.
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Under the proposed rule change, retailers would also be prevented from hitting customers twice with a late payment fee and withdrawing pay-on-time discount.
The rule change will limit conditional discounts for both gas and electricity retail offers to reasonable costs.
The Government has submitted a rule to the Australian Energy Market Commission (AEMC) to bring the rule into effect.