Electricity and gas retailer Simply Energy has been fined a total of $60,000 by the industry watchdog for allegedly switching customers without consent.
The Australian Energy Regulator (AER) has taken action against Simply Energy because it “had reason to believe” the company had breached National Energy Retail Law by failing to obtain explicit informed consent before entering customers into new energy contracts.
The AER alleges that, on three separate occasions, customers who received Simply Energy telemarketing calls either did not understand the nature and the purpose of the call, or did not have the capacity to provide the proper consent. Affected customers included residents of a nursing home and a retirement village.
“While active competition between energy retailers can help customers get a better deal, the explicit informed consent provisions of the Retail Law provide fundamental protections to stop retailers unlawfully switching customers who have not been made fully aware of what they are agreeing to, or indeed who have not agreed at all,” AER Chair Paula Conboy said.
“Protecting vulnerable consumers and promoting confidence in the retail energy market are ongoing priorities for the AER. Where we see evidence of retailers failing to comply with their obligations, we will take appropriate enforcement action.”
The alleged conduct occurred in New South Wales in 2015 and Simply Energy reported the incidents to the AER in accordance with its reporting obligations. The company previously paid penalties of $80,000 in 2015 in relation to alleged breaches of the explicit informed consent obligations in 2014.
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Retail Law or Rules. The AER can issue an infringement notice where it has reason to believe a business has contravened a civil penalty provision of the Retail Law or Rules.
The National Energy Retail Law and Rules set out key protections and obligations for energy customers and the retail and distribution businesses they buy their energy from.
The Retail Law requires a retailer to obtain the explicit informed consent of a customer to transfer the customer to a new energy retailer, or to enter the customer into a market retail contract. In order for a customer to give their explicit informed consent, a retailer, or a person acting on their behalf, must clearly, fully, and adequately disclose all matters relevant to the customer’s consent, including the purpose or use of the consent.
In March 2015, in proceedings brought by the AER, the Federal Court imposed penalties of $500,000 against another energy retailer, EnergyAustralia, for failing to obtain the explicit informed consent of 27 customers in South Australia and the ACT before transferring them to new energy plans.