Red Energy has paid $254,436 in penalties to the Victorian energy regulator after allegedly sending customers incorrect or minimal best offer messaging on their energy bills last year.
The Essential Services Commission (ESC) alleged that the retailer failed to correctly communicate best offer messaging to 30,982 customers over a two-week period in 2022. This included households on energy concessions and payment assistance schemes.
The ESC also alleged that Red Energy had failed to provide any best offer messaging to a further 15 customers within the correct timeframe, over a three-year period from 2019-2022.
Best offer messaging has been a requirement on energy bills in Victoria since July 1, 2019 and notifies customers of any potential savings they may have if they were to switch to their retailer’s ‘best offer’.
This best offer is determined by the customer’s past year of energy usage and does not include any sign up or discount incentives.
Retailers are required to display best offer messaging on electricity bills at least once every three months and every four months for gas bills. Customers, however, can ask their retailer at any time if they are on its ‘best offer’ for them.
ESC Chairperson and Commissioner Kate Symons said this error from Red Energy meant customers were missing valuable information regarding their energy plans and costs.
“In these matters, customers were deprived of critical information they are entitled to under Victorian energy rules to help them to make informed decisions about what energy plan best suits their needs,” she said.
“The commission regards the impact of these alleged breaches to Red Energy’s customers and to consumer trust in the sector more broadly, as significant.”
In a recent report from the ESC, it was found that customers not on their retailer’s deemed best offer could have missed out on up to $400 in energy savings in the past financial year.
Ms Symons added: “Retailer obligations that provide customers with clear, timely and accurate best offer information are even more important in an environment of higher energy prices. We know only one in two Victorian residential customers took up their retailer’s best offer last financial year, leaving millions of dollars in potential bill savings on the table as a result.”
Red Energy was said to have self-reported the incident to the regulator and has since issued a correction letter to the 30,982 customers impacted by the incorrect messaging.
Best offer messaging has also recently been introduced to billing information in New South Wales, Queensland, South Australia, the Australian Capital Territory and Tasmania.