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Reflect

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The Ombudsman's view

Cynthia Gebert

"The effects of Omicron may be reflected in early 2022, and we will be watching case numbers as the effects hit at the same time as we anticipate more companies to initiate debt collection and disconnection."

Case numbers dropped in the last quarter of 2021 and were down against the same quarter in 2020. It is not unusual for case numbers to decline toward the end of the calendar year, however, the long-term trend downwards in EWOV case numbers is evident, despite the significant issues in the Victorian community, such as utility affordability exacerbated by the COVID-19 pandemic.

The most recent Omicron variant has resulted in a notable increase of COVID-19 cases in Victoria, starting in late 2021 and escalating into 2022, having an impact on all parts of life, from the ability to work and more time working from home to supply chains disruptions. The effects of Omicron are unlikely to be reflected in our end-of-year data, but may be reflected in early 2022, and we will be watching case numbers as the effects hit at the same time as we anticipate more companies to initiate debt collection and disconnection. We go into more detail about debt collection and disconnection in the Issues watch section of this publication.

Our outreach and engagement activity has also been affected by COVID-19 again. We briefly restarted face-to-face outreach activity before the Omicron wave took hold and COVID-19 case numbers began to rise. We look forward to returning in-person to the community soon; in the meantime, we will continue working with our community partners to ensure we hear about their customers so we can respond to their concerns, and identify any trends in customer experience that could inform our conversations with regulators, policy makers and industry.

We delve into all this and more in the latest edition of Reflect. As always, you can find more data relating to our casework in the Data Hub.

See more in our Data Hub

Issues watch

Debt collection

Debt collection cases (Credit > Collection > Debt Collection Agency and Credit > Collection > Retailer Debt Collection) trended up in 2021, at a time when our overall case numbers were trending down. This is particularly true for complaints related to debt collection agencies. Debt collection agency cases went from 22 in January 2021 to 46 in December 2021.

In some of these cases, customers reported to us that they experienced issues such as losing income due to COVID-19, being carers on limited income or victim-survivors of family violence. In several of these cases, customers told us that their debt had been sold to debt collection agencies after they informed their companies about their issues. The debt collection agencies vary, however, Panthera Finance and Probe Group are the most common agencies reported to us in the last quarter of 2021.

Utility debt is likely to remain a significant issue for Victorian energy and water customers. In April 2021, the Essential Services Commission announced that Victorian household debt had risen to more than $103 million and that the amount owing had gone up 35% from April 2020. Ten months following this announcement, with further waves of COVID-19 and the associated personal and economic impacts, this issue remains of particular concern. Energy and water companies have an opportunity to impact the level of household debt by ensuring affected customers are provided with proactive assistance under the Payment Difficulty Framework to help customers get on top of their payments and usage, and to help customers access all entitlements, including concessions and the Utility Relief Grant Scheme.

Unplanned outage cases

Over 2021 we experienced spikes in unplanned outage complaints (Supply > Off Supply – Unplanned), with the most recent coming in the October-December 2021 quarter due to a major storm event. It was the wettest November on record for Australia, successive storms and flooding events left thousands of Victorian customers without essential services, particularly electricity. Supply > Off Supply – Unplanned cases rose from 2% of total cases received in October to 18% of total cases received in November.

We experienced another spike in the middle of 2021, following destructive storms that left more than 200,000 homes without electricity. Supply > Off Supply – Unplanned cases rose from 2% of total cases received in May to 8% of total cases received in June.

In many of these cases, customers have reported that communication has been a challenge. Many customers told us that there was difficulty in getting timely and accurate information about the outages and how long they would last, and several customers reported that the communications issues were a main part of the complaint they had brought to us. With the La Niña a weather trend predicted to persist into 2022 and extreme weather events due to climate change tipped to increase in the future, there is an opportunity for companies to overhaul their communication strategies in preparation for these extreme weather issues. Updated strategies may focus on multi-channel and proactive communication to customers in the event of supply issues.

Disconnections update

Disconnection cases (Credit > Disconnection/Restriction > Imminent and Credit > Disconnection/Restriction > Actual) trended down in 2021, following highs in February and March, as companies reduced their disconnection activity in response to the reintroduced COVID-19 restrictions. We saw a slight increase in disconnection cases in December 2021, rising from 37 cases in October to 53 in December, as Victoria came out of what is expected to be the final widespread lockdown for the state.

Several retailers feature in our disconnection cases in the October to December 2021 quarter, however, it should be noted that far from all of the retailers in our scheme were present in our cases. Two of the larger retailers account for more than 40% of the disconnection cases in the quarter. If more retailers resume disconnections in 2022 and large retailers increase the number of disconnections they action, we would expect disconnection cases to increase in the coming months.

The big picture

  • From October to December 2021, we received 4,037 cases, down 17% from the previous quarter and down 14% from the same quarter in 2020.
  • Billing cases dropped 24% compared to the previous quarter and were down 30% compared to the October to December 2020 quarter.
  • We received 455 high billing cases from October to December 2021, down from 659 high bill cases from the same time last year.
  • Credit cases dropped 23% in the quarter, compared to the previous quarter. Credit cases were also 15% down when compared to the same quarter last year.
  • Credit collection cases decreased 18% compared to the previous quarter (dropping from 314 to 257 cases) but increased as a proportion of all Credit cases – in the July to September 2021 quarter Collection cases accounted for 43% of credit cases, while in the October to December 2021 quarter Collection cases made up 45% of credit cases.
  • Land cases rose 52% compared to the previous quarter (from 118 to 180 cases) largely driven by an increase in property damage cases, and network asset placement and maintenance cases.

Disclaimer

  • Reflect and Data Hub data is a ‘live’ view of case data up to the end of the previous period.
  • Cases can sometimes be amended, reopened and reallocated — adjustments made to cases in previous quarters will be shown in the previous quarter's figures within the visualisations.
  • For these reasons, there may be discrepancies between previous quarter data presented in the visualisations and the information presented in past editions of Reflect.

Customer stories

Credit

Family violence including economic abuse and debt collection

DEBT COLLECTION | FAMILY VIOLENCE

Case number: 2021/13084

A representative for Jeevika* contacted us with a complaint about debt collection. Jeevika had experienced significant family violence, including economic abuse, and had to move from the property associated with the debt months ago with their two young children. They were on a payment plan for large debts for both gas and electricity with the one retailer. When they left the property and could no longer make payments, the representative contacted the retailer by email twice about Jeevika’s inability to pay but the retailer didn’t respond. After that, Jeevika began to receive phone calls and emails from a debt collector about the outstanding debt.

Jeevika’s representative asked that the debt be recalled from the debt collection agency and that the retailer waive the debt due to Jeevika’s circumstances. We raised an Investigation, using our discretion to bypass the initial Assisted Referral stage due to Jeevika’s financial difficulties and family violence. We also bypassed the initial stage of Investigation, raising a Stage 2 complaint because we believed Jeevika’s concerns couldn’t be resolved quickly.

As part of our Investigation, Jeevika’s retailer told us that it sent a letter to Jeevika in January 2021 advising them they would be removed from the hardship program due to lack of participation but that a payment plan was reinstated in March 2021. They advised they had no contact with Jeevika from 21 March 2021 and that the accounts were closed due to a transfer request received on 21 July 2021. At the time of closure the electricity account final balance was $1654.55 and the gas account balance was $1929.84. The retailer received small payments after closure and sent letters to Jeevika in August and September 2021 advising that they would be removed from the hardship program and that the balance would need to be paid off or risk collections action. The retailer advised us that, taking into account Jeevika’s situation, it would waive the outstanding balances on both the electricity and gas accounts. Jeevika’s representative told us they were satisfied with that outcome and we closed the case.

* Name has been changed

Supply

Unplanned outage after storm and communication issues

UNPLANNED OUTAGE | LIFE SUPPORT | COMMUNICATION

Case number: 2021/13513

Marie* contacted us on our 1800 number on 1 November 2021 about an unplanned outage after storms. Marie told us they lost supply and called their distributor, who advised that the supply would be restored on a certain date. Supply was not restored on that date, according to Marie, and when electricity was restored the voltage level was insufficient to run appliances. Their partner uses a sleep apnoea machine with oxygen and ventilation, and that device could not work with the low voltage. Marie said they received a text message saying that power would be restored on 30 October 2021 and another advising 2 November 2021, which contradicted a message on the distributor’s website stating 3 November 2021. They had called the distributor several times but could not resolve their issues. Marie wanted the distributor to attend the property to check the voltage and then rectify the voltage level.

We raised an Assisted Referral, directing Marie’s complaint to the distributor. The distributor responded, saying records showed supply was restored on 2 November 2021 at 5.30 pm. It apologised for the length of time taken to restore power, citing the extensive damage to the network due to the storm. It also acknowledged the frustration with the accuracy of supply restoration information, saying it experienced difficulties updating its outage records. The distributor confirmed that a Guaranteed Service Level payment of $90 applied and that it was willing to offer an additional Customer Service Gesture payment of $200. On the subject of voltage, it provided evidence that showed since the electricity supply was reconnected the voltage remained within the allowable limits in the Electricity Distribution Code.

Marie was not satisfied with the distributor’s explanation and queried the validity of the voltage readings. They also advised us they were seeking $500 in compensation for loss of medication and poor customer service. We raised an Investigation on Marie’s behalf. The distributor agreed to the resolution of $500. Marie told us they were satisfied with that outcome and we closed the case.

* Name has been changed

Network assets

Questions over pre-dig report and buried pipes

NETWORK ASSETS | WATER

Case number: 2021/12691

Gloria* contacted us via our web complaint form about a dispute relating to asset placement and information. They said they requested a pre-dig report to install a driveway crossover and that the report showed no water pipes in the area. They excavated for the crossover and exposed a water pipe buried under the surface. Gloria told us they contacted their water company and it advised that they would have to pay $600 for the pipe under the footpath to be replaced. Gloria wanted the company to relocate the pipe at no cost and for it to provide accurate records to the public.

We raised an Assisted Referral with Gloria’s water company. Gloria returned to us, stating that the company had not resolved their complaint and that the company maintained that they needed to arrange for their own plumber to fix the pipe. We raised a Stage 2 Investigation, as we believed that Gloria’s concerns could not be resolved quickly. During our Investigation, Gloria hired a private plumber to relocate the pipe so that the driveway crossover could be completed. They were now seeking reimbursement for the costs of hiring the plumber.

As part of our Investigation, the water company informed us that its view was that it is responsible for the maintenance and repairs of the property service pipe up to the main meter but that it is not its responsibility to relocate a property service pipe where there is no fault with the pipe and where metering is compliant. It also confirmed that the pre-dig report states that the location of all assets should be proven on site prior to the commencement of any works, as property service pipes are not owned by the company and are not listed on plans. It advised that Gloria could contact its land development team to go through options and costing for works to be completed.

We reviewed the company’s response and supporting documents, and we were satisfied that the company’s offer addressed Gloria’s complaint. We asked Gloria to respond to our assessment that the company had addressed their concerns. We did not receive a response from Gloria by the stated time and we closed the complaint, as our Charter allows us to stop handling a complaint if it is fair and reasonable to do so.

* Name has been changed
Fair and reasonable

Water leak leads to an offer and a fair and reasonable assessment

WATER | HIGH BILL | FAIR AND REASONABLE

Case number: 2021/7153

Binita* contacted us via our online complaint form with a dispute about a high bill. Binita told us they received a water bill more than triple the expected amount. After talking with their water company, they discovered a leak in the outdoor watering system. They said they were advised by the company to cut the pipe to ensure the leak was remedied, in order to qualify for a reduction in the amount they owed for usage. After they cut the pipe, a reduction was offered but they believed it did not take into account their financial hardship, which included family member hospitalisation and loss of income due to COVID-19. They were seeking a reduction of $415.25 for the usage from the original $1,099 bill, however, the water company had offered a usage reduction of $246.35 and $119.80 on the sewerage disposal charge.

We raised an Assisted Referral, outlining Binita’s dispute and their desired resolution. Binita returned to us saying they were still dissatisfied. They said the water company had offered a payment plan of $52 per fortnight, which they said they could not afford, and had not offered any additional usage reduction.

We then raised a Stage 2 Investigation, as we believed that Binita’s case could not be resolved quickly. Binita’s company responded to our request for information, confirming the bill reductions offered and its reasoning for the amounts, namely bringing the reductions in line with the Victorian Water Industry Guidelines for Unexplained High Usage and Undetected Water Leaks. Its calculations showed that the amounts offered to Binita satisfied the guidelines.

We wrote to Binita outlining a summary of the complaint and the water company’s offer of resolution, and that we were satisfied that the water company’s offer addressed the complaint. We told Binita we had determined that the high bill was caused by a leak on the customer’s side of the meter and that the leak allowance satisfied the minimum amount under the guideline. We also noted that the company had offered further assistance via its Customer Care team and a payment plan. We asked Binita to let us know if they disagreed with the information and the resolution. Binita told us they were not agreeable to the resolution and wanted the case escalated to a manager in EWOV.

We then prepared a Fair Offer Investigation Report, where we apply several principles as they relate to the case. In Binita’s case, we looked at previous case results, good industry practice and customer service performance in judging if the offer was fair. We found that the company’s offer was in line with previous EWOV case results and we found that good industry practice was to provide an affordable payment plan and not a debt waiver beyond the guidelines. We also found that there were no instances of poor customer service in the information we reviewed. Binita was not agreeable to the resolution outlined in the report, however, our Charter provides us with the opportunity to stop handling an investigation if we think the participant has made a fair offer to resolve the complaint and the customer has not accepted it. We wrote to Binita to let them know that we believe that their company had made a fair and reasonable offer but that it hasn’t been accepted, and that we had decided to close the case.

* Name has been changed

Outreach

Our focus on community outreach and engagement supports our goal of increasing accessibility and awareness of EWOV while building relationships with organisations that work with Victorian energy and water consumers who may be at the greatest risk of experiencing financial vulnerability.

In the final quarter of 2021, we resumed outreach in the community before the Omicron wave landed. With the easing of restrictions and Victoria opening up, we visited the Banyule Support & Information Centre (BANSIC) in Heidelberg West, held a Bring Your Bills day in Sunbury and we shared information through an interpreter at Arabic Energy Information Session for asylum seekers at the Thomastown Library. At these face-to-face events, we learned of the significant financial and mental impacts of sustained lockdowns on Victorian families. Our community partners also expressed their concerns about the implications of the return of disconnections and debt collection activities by providers. In October, we also arranged for promotional posters to be sent to all St Vincent de Paul store change rooms throughout Victoria.

The first meeting of the revised Community Consultation Group (CCG) was held in mid-November. We provided a detailed insight into complaint data and trends, systemic issues, recent reports, case studies and new initiatives and projects EWOV is working on. Members were able to share direct knowledge of the lived experiences of community members, to raise questions and concerns about case processes and outcomes, to inform us how we can better serve them and their clients. The Ombudsman also spoke at Financial Counselling Victoria’s Utilities Working Group and RMIT’s Meet the Ombudsman session for students of financial counselling.

We also started a new partnership with Bravery Trust, an organisation that provides emergency financial relief and financial counselling to serving and ex-serving members of the Australian Defence Force who have an injury or illness as a result of their service. We also reached out to Carer Gateway, an Australian Government initiative that aims to support carers experiencing emotional and financial stresses. We provided these organisations with information for their communication channels that outlined what we do and how we can help. We also worked with Australian Red Cross providing information and assistance as part of their Utility Subsidy Program and Migration Support Programs.

Scheme participants

In our Data Hub, you'll find the latest quarterly case data for all of EWOV's scheme participants.

Systemic issues

From October to November 2021, we closed eight energy systemic issues and one water systemic issue identified through our case handling. Systemic Issues investigations are currently paused due to resource requirements.

Maximum demand presented incorrectly
We identified a systemic issue from one of our cases, where a retailer’s bills showed the correct total charge but the maximum demand line item was incorrect. The line item would usually be presented as maximum demand (kW) multiplied by the days of the billing period multiplied by the rate. The retailer was multiplying the kW by the days and referring to this as the maximum demand. The retailer implemented a short-term solution, showing information on the bills, and committed to a long-term solution that would bring the bills in line with the expectation. SI/2021/2

Disconnections lead to Essential Services Commission review
We received 19 disconnection disputes in early December 2020 about a retailer disconnecting customers, where the retailer was offering to waive debt if the customer changed retailer. The majority of these customers were vulnerable and likely eligible for tailored assistance under the Payment Difficulty Framework (PDF). At least one case involved a customer alleging that they had not been offered payment assistance prior to disconnection and that a warning notice was received the same day as the actual disconnection. We spoke to a distributor and it advised that of disconnection requests in December 2020, 92% were from this retailer. The retailer remained of the view that it had complied with the PDF. We notified the Essential Services Commission (ESC) and its decision is pending. SI/2020/59

Billing above the Victorian Default Offer
We identified, in our casework, that an exempt seller was billing in excess of the Victorian Default Offer (VDO), contrary to changes implemented by the ESC on 1 September 2020. The seller acknowledged that it had not been charging in line with the VDO and advised that it credited each customer the amount overcharged. It agreed to apply the correct rates going forward. SI/2021/67

Exempt seller not meeting obligations
We identified that an exempt seller was not meeting its obligations under clause 25 of the Energy Retail Code. The seller admitted to being unaware of the requirements under clause 25 but took action to rectify the issue, making changes to include five of the missing nine requirements. The seller was unable to include the remaining four but was working on further inclusions. While we were satisfied with the steps taken, we were of the view that a compliance breach had taken place and referred the seller to the ESC. SI/2021/11

Another exempt seller misses obligations
We identified another seller that was not meeting its obligations under clause 25. The seller also admitted to being unaware of the requirements and took action, making changes to include six of the missing 12 items and committing to including the remaining six. We were of the view that a compliance breach had taken place and we referred the seller to the ESC. SI/2021/16

Family violence systemic issue
We heard from customers impacted by family violence that a retailer had made inappropriate requests and engaged in concerning privacy behaviour, putting customers at potential risk. The retailer was of the view that it had met its obligations. While we did not find that the retailer had failed to meet its regulatory obligations, we found that financial counsellors were frustrated with their inability to resolve the issue. We provided the retailer with recommendations and suggestions, along with complaint insights to reduce the risk of further complaints. SI/2021/42

Multiplier on certain meters
An EWOV Investigation discovered that a retailer had not met its obligations under clause 25 of the ERC about the content of a bill and the ease in which it can be verified. Some meters are subject to a multiplier of 40 due to the large amount of electricity used. Retailers tend to include information about this on bills so a customer can validate the bill against the meter. The retailer initially offered to rectify but did not act on it, relying on clause 20(1)(a)(i) which provides that retailers need to generate invoices on the metering data provided by the distributor. We disagreed with the retailer’s position and were not convinced that the clause waived it of any obligations under clause 25. Given the low number of customers impacted and that clause 25 attracts no penalty, we chose not to formally refer the matter to the ESC. SI/2021/29

Complaints allege a retailer was not contactable
Multiple complaints to EWOV suggested that a retailer was not contactable. The retailer advised that it was due to popular new plans and understaffing. It advised that it has taken on additional staff and introduced a complaint management inbox. Team leaders are now expected to action complaints within one hour. We saw a reduction in customer complaints to EWOV after these measures were implemented and we were satisfied with the steps taken. We also made recommendations about providing notice of any changes that could lead to an increase in EWOV complaints. SI/2021/57


Billing system error leads to hundreds of backbills
We received complaints about a water corporation delaying bills before issuing backbills and, in one case, multiple backbills. The corporation explained the issue was a billing delay caused by a system error following a system upgrade that created a false balance on the customer’s account. The water corporation confirmed that the issue affected 592 customers. The issue was not expected to re-occur once each customer’s account had been manually fixed. Some customers were offered payment plans over a year, some customers were given credits, and bills going back further than 12 months were written off in accordance with the code. We were satisfied with the action taken and all complaints with EWOV have been resolved. SI/2021/51

Glossary

Visit the Data Hub for a full glossary of terms.