EnergyAustralia cops $1.5 million penalty for disconnecting hardship customers

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One of Australia’s largest energy retailers has been ordered to pay $1.5 million in penalties by the Federal Court for failing to protect financially vulnerable customers.

It’s alleged that EnergyAustralia breached National Energy Retail Law in regards to its dealings with eight customers experiencing financial hardship.

The Federal Court states that between 2016 and 2018, EnergyAustralia breached multiple retail laws that are in place to protect customers.

Australian Energy Regulator (AER) Chair Clare Savage said customers doing it tough financially should have been protected under retail legislation and relevant company hardship policies.

“There are clear laws in place requiring all energy retailers to give extra protection to customers who are in financial hardship,” she said.

“The penalties imposed by the Federal Court should send a clear signal to every energy retailer about the importance of complying with their obligations under these hardship laws.”

Each of the eight affected customers resided in New South Wales, Queensland and South Australia, all of which were deemed vulnerable by the AER.

Clare Savage added: “As a matter of priority we will continue to monitor energy businesses compliance with hardship obligations, and take enforcement action where appropriate. I also want to remind customers who are doing it tough to talk to their energy provider so they can access the support and protections they are entitled to by law. Speak to your energy ombudsman if what is offered isn’t right for your circumstances.”

Breaches by EnergyAustralia included:

  • Failing to maintain and implement EnergyAustralia’s hardship policy.
  • Failing to inform customers of its hardship policy.
  • Failing to provide customers with the opportunity to enter into appropriate payment plans.
  • Failing to offer and apply a reasonable and manageable payment plan.
  • Wrongfully disconnecting customers experiencing financial hardship.

EnergyAustralia: “We’re very sorry”

In response to these breaches, an EnergyAustralia spokesperson said: “The Federal Court has ordered EnergyAustralia to pay a $1.5 million penalty for disconnecting eight customers who were experiencing hardship. To the eight customers affected, we are very sorry. There is no doubt we made mistakes and fell short of the standards people expect of us.

“Since this occurred, we have created more steps to engage customers and determine what level of support they may need. We have also significantly improved and strengthened our systems, training and controls to ensure we help customers in need.

“Today, our EnergyAssist program delivers support to thousands of people each month. Especially now with COVID-19, we’ve provided more payment plans and bill extensions, invested in more resources and we’ve stood up a dedicated program for businesses experiencing hardship.

“We remain committed to supporting customers experiencing hardship. We recognise that customers have never needed us more than they do today.”

What are your rights as an energy customer?

As an energy customer, your rights as a consumer are plentiful, and rather than burying your head in the sand, it’s best to reach out before bills become unmanageable, said Canstar Blue Editor-in-Chief, Simon Downes.

“If you’re one of many Aussies battling your power bills right now, pick up the phone and call your energy provider, and make sure you talk through your options,” Mr Downes said.

“The last thing you should do is look the other way and hope your bills magically disappear, and keep in mind that retailers must comply with strict laws designed to help in stressful financial situations like these.”

If energy bills are getting on top of your finances, check out some of our helpful guides:

Image credit: Kym McLeod/Shutterstock.com

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