Vic Gov’s new direct marketing rules “draconian”

direct marketing

The Australian Energy Council (AEC) says rules announced by Victorian Labor to block direct marketing practices for energy retailers such as door-knocking have occurred without industry consultation or objective cost-benefit analysis.

“Heavy-handed rules aimed at protecting Victorian consumers instead scapegoat energy retailers and do not address consumer concerns about rising energy bills,” the council said in a statement.

The AEC’s chief executive Sarah McNamara said door-to-door selling is not exclusively used in the energy market, and governments need to be sure any changes are in the public interest.

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“Banning smaller energy retailers from reaching new customers will only entrench concentration at the top end of the retail market,” Ms McNamara said.

“Smaller retailers may go out of business, and we will lose Victorian jobs to other states that foster competitive practices instead of stifling them.

“The industry is always open to a discussion with governments about how best to market to consumers.

“But these measures, introduced without any assessment of the impact on Victorian consumers or businesses, are draconian and bring unintended consequences.”

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The AEC fears the measures, if implemented, will:

  • not capture solar providers, who regularly sell deals to consumers via unsolicited door knocking and telemarketing. Their practices will continue unchanged;
  • put in place fines for wrongful disconnection that are grossly disproportionate and mean that one breach could put a small retailer out of business; and
  • restrict retailers from back-billing even in circumstances where they have been delayed by a failure of networks to provide them with the necessary data to do so.

“… retail costs have been high in Victoria because there are cost pressures on all parts of the supply chain,” Ms McNamara said.

“Constraining the energy industry from communicating cheap deals to Victorians makes no sense.

“Victorian energy consumers deserve policy announcements backed by evidence so that we can be confident that there is an actual benefit to consumers.”

The Victorian Government has been contacted for comment.