Sneaky Energy Bill Tactics Slammed In ‘Super’ Complaint

Consumer group CHOICE has asked the Australian Competition and Consumer Commission (ACCC) to look into what it says are whiffy energy bill tactics that could be costing many Australians a significant chunk of change.

CHOICE is an independent and member-funded consumer advocacy group that was established nearly 67 years ago. The organisation was among the first nominated by the Federal Government last year to be able to submit a designated complaint (aka a ‘super complaint’) relating to significant or systemic market issues negatively affecting a large group of Australian consumers or small businesses.

CHOICE can only submit one designated complaint each year, so it’s keen to make each count. And the organisation’s first is to the ACCC, requesting the Commission look into energy retailers potentially misleading their customers through:

• Using identical names for energy plans, particularly in ‘Best Offer’ and ‘Better Offer’ messages on bills, despite offering these plans at different prices. This may be leading consumers to believe the message was a mistake, or irrelevant to them.
• Using names and descriptions that refer to ‘savings’ – but the plans offer poor value.
• Advising customers to switch to plans via ‘Better Offer’ or ‘Best Offer’ messages that do not appear to be available, or that the customer is not eligible for.

Same Energy Plan Names Create Confusion

Research carried out by CHOICE between January and March this year involving analysis of 382 recent energy bills provided by the organisation’s supporters found 64 examples of plans in ‘Best Offer’ messaging on bills with the same name across 9 different retailers and 20 different plan names.

In most cases, these plans appeared to have the same terms, conditions and tariff structure as a customer’s existing plan — the only difference being price. CHOICE says on average, customers were missing out on estimated yearly savings of $171, and in the worst case, $588 a year as a result of consumer confusion.

The requirement for retailers to include ‘Best Offer’ and ‘Better Offer’ messages in energy bills periodically was introduced across the National Electricity Market (Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia, and Tasmania) with the intention of encouraging consumers to switch to more competitive offers from their current retailer.

This isn’t just CHOICE assuming confusion was stopping people from switching. Many affected consumers who gave their bill to CHOICE said they found it difficult to tell the difference between their current offer and the quoted better offer where the same name was used. And consumer confusion can be compounded where plans are described as ‘variable’.

CHOICE’s modelling estimates this practice could collectively be costing Australian consumers approximately $65 million a year in missed savings.

The retailers said to be involved in this practice include Red Energy, Energy Australia, AGL, Momentum Energy, Dodo, Energy Locals, Alinta Energy, Powershop and Origin (full disclosure: Origin is the owner of SolarQuotes).

Save … Or Spend More?

Among the bills CHOICE analysed were several plans with names including terms such ‘save’ or ‘saver’. But some of these were more expensive than other plans offered by the same retailer, and even more costly than the retailer’s standing offer. A standing offer is meant to be a safety net — it’s a default plan assigned to customers who don’t select a market offer, and these are generally not as good value as market offers.

Such A Tease

Among the bills were also examples with a ‘Better Offer’ or ‘Best Offer’ message referring to a plan that was listed on the retailer’s website as available only to new and moving customers — or not listed on a retailer’s site or the Energy Made Easy website at all.

“It shouldn’t be this hard to know if you’re being ripped off on your energy bill,” said CHOICE CEO Ashley de Silva. “We’re calling on the ACCC to enforce the law with strong court action to put an end to these dodgy practices costing consumers money.”

The ACCC must publicly respond to CHOICE’s complaint within 90 days. The full complaint can be viewed here.

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