Changing energy providers if you’re in debt

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Let’s face it, we all use energy – from flicking a light switch to turning on the dishwasher – there’s no escaping it. And the reality of using energy means that households have to foot a power bill every so often, which can leave many customers struggling financially. What’s worse is that electricity prices only seem to head in one direction.

According to the Australian Competition and Consumer Commission (ACCC), electricity prices have increased at a compound annual growth of eight per cent from 2007 to 2017, well above the average growth of wages during this period. The Australian Energy Market Commission (AEMC) also reports that low-income households miss 3.6 energy bill payments per year. At a time where energy prices are constantly changing, some Aussie households are understandably feeling the pinch more than others, begging the question: can you switch energy providers if you’re in debt?

Can you change energy providers if you’re in debt?

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Customers in debt might be able to switch electricity or gas providers, however energy companies are entitled to carry out credit checks where required. Keep in mind that changing energy providers won’t magically wipe away your debt, and you’ll still need to make arrangements with your existing power company for any outstanding payments.

Should an energy retailer you’re looking to switch to decide that a credit risk assessment is required, the company will gain access to some of your personal and financial information. Generally, this will include past credit applications, default information, credit infringement history and maybe more. You will also need to give the new energy retailer permission to check your credit history. From here, the company will usually inform you if switching is an option, given that you’ve satisfied the retailer’s terms and conditions.

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Energy Financial Hardship Policies Explained

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Under Australian Retail Law, energy providers must have customer hardship policies published on their websites, outlining consumer rights for households struggling to pay energy bills. On 2 April 2019, the Customer Hardship Policy Guideline came into effect by the Australian Energy Regulator (AER), meaning that energy retailers now have a range of responsibilities they must comply with, including:

  • Identifying customers experiencing financial hardship
  • Providing information about a retailer’s customer hardship program
  • Making contact information and the hardship policy easily accessible
  • Providing payment plans, options and simplifying the language in policies

You can view the entire AER Customer Hardship Policy Guideline (Version 1) here.

How to contact the Energy Ombudsman

If it’s come to the point where you simply cannot come to an agreement with your energy retailer about your bills and you feel as if your consumer rights haven’t been met, then you can contact the Energy Ombudsman. Depending on where you live, the ombudsman should give you impartial advice about your options to help resolve the issue.

Here are the contact numbers for the ombudsman in each state:

  • NSW: Energy & Water Ombudsman NSW (EWON) – 1800 246 545
  • VIC: Energy & Water Ombudsman VIC (EWOV) – 1800 500 509
  • QLD: Energy & Water Ombudsman QLD (EWOQ) – 1800 662 837
  • SA: Energy & Water Ombudsman SA (EWOSA) – 1800 665 565
  • WA: Energy & Water Ombudsman WA (EWOWA) – 1800 754 004

How to save money on energy bills

Budgeting for future, Australian currency and calculator

Lowering your yearly energy costs doesn’t have to be painful. If you’re willing to change a few bad habits, saving money on electricity and gas can be pretty straightforward. We’ve listed some simple steps you can take to save money on energy bills.

  1. Adjust your air conditioner to optimum temperatures in summer and winter
  2. Close all curtains, doors and windows when using an air conditioner
  3. Switch off appliances at the wall to avoid using standby power
  4. Fit your home with roof and wall insulation
  5. Wash your clothes with cold water
  6. Choose energy-efficient appliances
  7. Replace your light bulbs with LED
  8. Shorten your shower time to three minutes
  9. Contact your energy provider and ask for a better deal
  10. Compare energy providers

Are there concessions for pensioners and seniors?

Yes, most energy retailers will offer concessions to pensioners and seniors on applicable electricity or gas plans, provided the customer meets the retailer’s eligibility criteria. Depending on the electricity and gas provider, pensioners and seniors may have access to plans with lower usage and supply rates, or products with larger overall discounts.

Is switching energy companies worth it?

While you may find a better deal with another energy retailer, it’s important to find out if there are any disconnection or exit fees attached to your current plan, as well as how long it’ll take to change to a new company. If you’re in debt with your current energy retailer, it may be worthwhile picking up the phone and talking through your options. The worst thing you can do is bury your head in the sand and hope the problem goes away.

If you decide to jump ship, you may want to consider choosing an energy retailer that provides monthly payment options, rather than being slugged with a larger quarterly bill. Or, an energy retailer that offers no credit card surcharges, as well as lower late payment fees. If you feel as if you’re not getting the best value for money with your existing electricity or gas provider, simply use our comparison tool to search through a variety of plans. But most importantly, remember you don’t need to sit in the dark if you’re experiencing financial hardship, and there are plenty of rights aimed at protecting you as a customer.


Image credits: Solarisys/Shutterstock.com, Jacob Lund/Shutterstock.com, artieQ/Shutterstock.com

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