Media release: New report calls on energy retailers to improve support for struggling households

Thirteen case studies from across Victoria show hardship assistance is failing customers.  Now, as typically high winter energy bills being landing in letter boxes, it’s time to act.

As winter energy bills begin landing in letterboxes, a new report from the Consumer Action Law Centre has identified fundamental flaws in the way energy retailers identify and assist struggling customers. Problems with Payment tells the stories of thirteen Victorians trying to stay on top of their energy bills, and reviews the performance of retailers’ assistance programs against best practice.

‘Energy is essential for so many day-to-day activities. It’s needed to wash, cook, heat and cool—it is the definition of an essential service, and that’s why retailers are required to assist struggling customers,’ said Denise Boyd, Director of Policy and Campaigns at Consumer Action. ‘Our concern is about the quality of this assistance—there appears to be a lack of understanding and consistency in how customers are treated.

‘In one case a customer struggling to afford the regular $30 payment plan she’d arranged with her retailer was threatened with disconnection unless she began paying $140 a fortnight. If you can’t afford $30 there is no way you can afford $140.

‘In another case a 77 year old carer says her energy company told her not to use gas heating and to use coats and blankets instead. This isn’t appropriate advice, in fact, it’s potentially dangerous. It shows a lack of understanding on behalf of the call centre representative, which is a common theme in this report,’ said Ms Boyd

Problems with Payment documents unaffordable payment plans, threats of debt collection or disconnection, and reveals worrying inconsistencies in how customers are treated.

Consumer Action’s report recommends energy retailers:

  • Take proactive steps to communicate that assistance is available, and to identify and assist struggling clients before their energy debts become insurmountable;
  • Develop and maintain a well trained ‘hardship team’ to focus on helping struggling and at risk customers;
  • Ensure easy and consistent access to information for financial counsellors and community workers who work closely with low income and vulnerable Australians.

Ms Boyd said Consumer Action was willing to work with energy retailers to develop best practice assistance programs.

‘We realise identifying and assisting struggling customers isn’t easy, and that customer service staff need to develop expertise to deal with vulnerable or marginalised clients. Energy retailers have indicated a willingness to work with community agencies to improve practices, and we welcome that,’ said Ms Boyd.

The stories in Problems with Payment also highlight the energy affordability crisis faced by many low income Australians. A 45 per cent increase in energy costs in just three years has made this essential service unaffordable for low income Australians who now spend up to 12 per cent of their income on energy, compared with 5.3 per cent for all households combined.

Ms Boyd said this report shows that, even with an affordable repayment plan, some very low-income customers are unlikely to ever be able to repay their energy bills. ‘While they’re paying off old bills, they’re continuing to accrue more energy debt at an alarming rate. Put simply, they are slipping into energy poverty.

‘Sadly these customers can’t afford energy efficient appliances or accommodation so their bills will often be high regardless of how vigilant they are. With energy prices increasing much faster than income levels, retailers, governments and advocates need to keep looking for new and innovative ways to make energy affordable. Raising the energy efficiency performance of the homes of low-income earners should be high on the list, and requires a dedicated and coordinated response by government, their agencies, and energy retailers.’

END

Media Contact: Dan Simpson, 0413 299 567

Problems with Payment is available in another format on request.

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