Res Online 19 (May 2017)

Number 19
May 2017

Res Online 19 - providing up-to-date information, statistics and analysis on energy and water complaints.

Overview

The Ombudsman's view

While EWOV’s purpose is fundamentally one of independent dispute resolution, we also have important aligned responsibilities — to publish information about energy and water complaints, to identify and report systemic issues, and to work collaboratively to drive customer service improvements and help prevent complaints. This issue of Res Online touches on all of these EWOV responsibilities.

Quarterly case trends

We registered 8,072 cases in the first quarter of 2017 — 7,654 complaints and 418 enquiries. Cases were down 4% on cases for the last quarter of 2016 and down 1% on cases for the first quarter of 2016. Generally cases were down across all industries. Billing remained the most common issue — billing issues were down 12% overall and down across all industries. Credit remained the second most common issue — credit issues were up 5% overall and up in both electricity and water. We made 6,231 complaint referrals and opened 1,413 complaint investigations.

Family violence – EWOV’s role

In the feature article, we explain EWOV’s role in and approach to complaints which identify as having family violence aspects. In March 2016, the Victorian Royal Commission into Family Violence noted the need for EWOV and other Ombudsman schemes to publicise the availability of our dispute resolution services, given we play an essential role in resolving disputes between utility service providers and consumers where financial security is at risk. Utility debt is recognised as a key contributor to the accumulation of household debt and financial insecurity for persons (in most cases, women) experiencing family violence. A customer in this type of situation may also be unable to engage with us, or with their energy or water company, in the same way as other customers do. It’s important, therefore, that our staff are able to recognise the signs of family violence and, within the scope of EWOV’s role, assist customers who present with these signs. In consultation with Domestic Violence Victoria, we’ve been running staff training to help us build our skills in this area.

Systemic issues – EWOV’s role

EWOV’s role in energy-related systemic issues is to identify and report them to the Essential Services Commission (ESC) for its investigation and subsequent action. If we believe a company has taken appropriate action to remedy the issue, we then close the investigation. However, where we are unable to resolve a systemic issue directly with a company — because, for example, we don’t receive a response or we aren’t satisfied there has been appropriate redress — EWOV has obligations to formally refer the issue to the ESC. Recent legislative changes mean that now, when EWOV formally refers a systemic issue to the ESC, the ESC must take a number of steps including notifying the Minister for Energy, Environment and Climate Change.

Case studies in this issue

  • Customer closed accounts with arrears and lost eligibility for Utility Relief Grant
  • Customer’s former partner switched accounts back into his name and authorised disconnection
  • Faulty gas meter recorded usage at 11 times more than actual
  • Removal of concession entitlements without notice
  • Double-billing after embedded network company acquires partial billing rights

Read this issue's case studies.

Issues watch

It is recognised that EWOV has a critical role to play in assisting customers whose family violence circumstances are revealed through our casework. This role was strongly articulated in the March 2016 Victorian Royal Commission into Family Violence and earlier in Helping Not Hindering: Uncovering Domestic Violence & Utility Debt, an August 2014 research report by the Consumer Policy Research Centre (CPRC). In each case, utility debt was identified as a key contributor to the accumulation of household debt and financial insecurity for persons (more likely to be women) experiencing family violence.

Family violence includes economic and/or financial abuse. Related to utilities, such as electricity, gas and water, examples of economic abuse can include scenarios where the abusive partner:

  • insists the account is in a victim’s name and refuses to contribute to the cost
  • puts a service in the sole name of the victim without their knowledge or consent
  • holds an account jointly and refuses to contribute to the cost
  • holds an account in their name alone and does not pay the bills, resulting in disconnection
  • holds the account in their name and threatens to have the service cut off, or has it cut off, when they leave the family home.

EWOV Position Statement

Published in January 2017, EWOV’s Position Statement 7 – Family Violence clarifies our approach to the resolution of complaints which point to family violence issues. This Position Statement covers the definition and effects of family violence and explains EWOV’s approach to family violence as a ‘special customer circumstance’. It provides common family violence scenarios relevant to the energy and water industries, and broadly outlines EWOV’s approach to the key issues arising from these — liability and consent issues, joint accounts, affordability and hardship assistance, debt collection/default listing, loss of supply, privacy and safety.

EWOV's Position Statements

EWOV’s Position Statements detail our general approach to seeking resolutions between customers and companies across common complaint issues. They are general in nature and intended to be viewed as a common guide to case handling. When a complaint is investigated by EWOV, it is still considered on a case-bycase basis. When creating Position Statements, we take into account our experience in handling specific types of complaints, relevant laws and codes, good industry practice and other factors that assist us in reaching fair and reasonable outcomes. All EWOV Position Statements are published on our website.

Special customer circumstances

In investigating complaints to arrive at a fair and reasonable outcome, EWOV has regard to laws and codes and good industry practice. We also consider other reference points — such as past case results or Binding Decisions, company policies, relevant legal or technical advice, regulatory advice, and special customer circumstances. Each complaint is considered on its merits and the outcome reflects the circumstances. Extenuating circumstances, particularly those which create customer vulnerabilities — extensive health or medical issues, language and education barriers, disability, or family violence — can be critical to establishing what is fair and reasonable in a particular case. A family violence situation clearly creates special vulnerabilities and EWOV considers these to be a ‘special customer circumstance’ relevant to establishing a fair and reasonable complaint outcome.

Trends in EWOV cases identified as having family violence aspects

Since January 2016, EWOV has registered 67 cases identifying with family violence aspects — 27 of these were received from January 2017 to March 2017. The 67 cases were lodged by 49 customers — some customers lodged more than one case (e.g. for electricity and/or gas and/or water). In 40% of cases the customer was represented by someone else, most commonly a financial counsellor (18%) or a friend or family member (16%). The family violence aspects of these cases largely came to EWOV’s attention because the customer (or their representative) self-identified. EWOV may have received other ‘unidentified’ cases.

57% of the cases were about electricity, 34% gas and 7% water. Just over 50% of the customers were tenants in private rental properties, 13% were Office of Housing tenants, 10% were property owners, and 9% were customers in transitional housing. 39 cases progressed to an EWOV Investigation.

Payment difficulties, energy disconnection and breaches of privacy were the most common issues arising from these cases. Often the customer was seeking our help to negotiate a payment arrangement and/ or hardship assistance. Sometimes, even though they’d left the property, they continued to be billed for usage. Sometimes they’d closed an account (or moved to another retailer) leaving debt — had the account not been closed, they may have been eligible for Utility Relief Grant assistance. Case study 1 provides an example of one customer’s experience of finding herself ineligible for a Utility Relief Grant, having closed her accounts.

Some customers say they didn’t receive any notification of default-listing or energy disconnection (possibly because they’d moved into transitional or emergency housing, or in with a relative/friend). Several customers raised concerns that an ex-partner had gained access to their contact details and/or new address. Case study 2 provides an example of one customer’s experience of an ex-partner’s intervention leading to supply disconnection.

Working collaboratively to help prevent complaints

In August 2016, EWOV and WEstjustice co-hosted an Energy, Water and Family Violence Roundtable to explore how energy and water companies, family violence community agencies, consumer groups, government agencies, regulators and EWOV might collaborate on initiatives to help restore financial security for family violence victims and minimise complaints. Participants agreed on the need to take action to recognise and respond to family violence — through training for energy and water staff across all areas/levels; policies that are able to take account of family violence situations; building knowledge of the community assistance that’s available through family violence, legal and financial counselling organisations; and consideration of particular issues affecting customers in rural and regional areas.

In late 2016, we organised a mail-out through Domestic Violence Victoria to a list of 24 Victorian organisations, which work with victims of family violence. This has helped build awareness of EWOV’s role and services.

Family violence policies for water businesses

From 1 July 2017, changes to the Essential Services Commission (ESC)’s urban and rural customer service codes will require all water businesses to have established and implemented a family violence policy by July 2018. The ESC will work with the water industry and the community sector on the development of a monitoring and reporting framework, to ensure these policies deliver outcomes that are in the interests of water customers and the community.

Family violence case studies

Top issues

Case studies

Cases by industry

Systemic issues

Regulatory changes

On 1 January 2016, the Energy Legislation Amendment (Consumer Protection) Act 2015 came into effect. This new Victorian legislation mainly focused on increasing customer protections. It also amended the Essential Services Commission Act 2001 to make some changes to the way the Essential Services Commission (ESC) investigates and remediates systemic issues.

In most instances, EWOV is able to resolve systemic issue investigations directly with an energy or water company, without the need to formally refer the matter to the ESC. However, where EWOV believes that the company has not taken appropriate steps to redress the issue, it must formally refer the matter to the ESC. EWOV’s obligations arise from our Memorandum of Understanding with the ESC and also in the ESC’s Energy Compliance and Enforcement Policy.

Under the legislative amendments, the ESC must provide a copy of EWOV’s referral to the Minister [Minister for Energy, Environment and Climate Change] outlining the action (if any) it proposes to take to address the systemic issue and the time within which it intends to take that action. As soon as practicable after the ESC’s indicated time for taking action ends, it must report to the Minister the outcome of the action. The Minister may direct the ESC to provide this report to EWOV.

Summary of systemic issue investigations opened and closed

January to March 2017

 

Energy

Water

LPG

Open/Under Investigation

7

0

0

Closed

10

0

0

Note: Systemic issue investigations opened and closed during the above period that cannot yet be identified as being systemic haven’t been included.

Issues identified through EWOV’s case handling as systemic

January to March 2017

Unusually short billing periods

Through EWOV’s case handling, we identified an instance where a customer received electricity bills for unusually short periods (e.g. two weeks) One of the customer’s main concerns was that she had to pay two bills close together (albeit a smaller second bill). The customer was advised by the energy retailer that the short billing period was due to a billing system correction. The retailer said that the unusually short billing periods were planned and action was taken to align all Victorian electricity customers’ accounts with electricity distributor billing schedules. It also said the bills issued were correct and the short billing period issue was a once-off. EWOV understands some 31,000 customers were affected. Customers who complained were offered a payment extension. SI/2016/58

Solar customers wrongly told their feed-in tariff was ending

An energy retailer notified EWOV that, in November 2016, it had incorrectly sent letters to some 6,504General Feed-in Tariff (GFiT) solar customers to advise that their feed-in tariff was ending. These letters were meant to be sent to Standard Feed-in Tariff and Transitional Feed-in Tariff customers only, but an error in the energy retailer’s data extraction process extended the mailing. The energy retailer said it had taken immediate steps to notify GFiT customers — by SMS, email and letter — that the letters were sent in error. It said there was no adverse financial impact for customers and GFiT customers continued to receive solar credits. SI/2016/77

Overcharging due to incorrect setting of demand charges

We identified through EWOV case handling that a business customer had its demand charges incorrectly set and billed, resulting in an overcharge of about $10,000. The energy retailer advised that the issue was due to human error. Six customers were overcharged. Manual credits were applied to correct the error. All other applicable business customers had demand charges suspended while the issue was investigated and fixed. The energy retailer said it would not seek to recover any charges incurred during its investigation. It confirmed that all business customers were migrated to a new billing platform from 10 June 2016, which resolved the problem. SI/2016/52

Supply disconnection after incorrect pay-by date on bills

We identified via EWOV case handling an instance of an energy retailer issuing a non-compliant bill to a customer who was subsequently disconnected. The pay-by date on the bill provided 12 business days, rather than the required 13 days under Clause 25 of the Energy Retail Code (for standard retail contract customers), or under the terms and conditions of a market retail contract. The energy retailer advised that the problem resulted from a preferred payment method system issue, which was fixed in December 2015. It said only one customer was disconnected after receiving a defective bill, even though the bills were sent to more than one customer. It confirmed that the customer who was disconnected received a Wrongful Disconnection Payment. SI/2016/44

Stepped gas usage thresholds not applied correctly

EWOV’s case handling highlighted instances where an energy retailer didn’t apply stepped gas usage thresholds in line with tariff descriptions. While the thresholds are calculated monthly, the tariff description states that usage thresholds will be stepped in accordance with the billing cycle, which is quarterly. We understand the issue affected some 25,943 concession card holders. The energy retailer said a total of $20,591 was refunded to customers who were overcharged. To prevent the same thing happening again, the accounts would be migrated to a different billing platform. Once this was done, it would recheck to see whether any further refunds were owed. SI/2016/1

Mixed messages for customers about tariff changes

EWOV’s case handling highlighted instances of customers being told by their energy retailer that their tariff would increase from 1 July 2016, because they’d been billed incorrectly as they lived on the border of two electricity distribution networks. The customers had previously been told their tariff would decrease. The energy retailer confirmed a billing migration issue, which affected some 6,186 customers. It said it was fixed in late 2014 by matching the distributors listed in national database (MSATS) with the energy retailer’s billing system and network tariff allocations. Customers who were charged less than the applicable rate were not backbilled and had the total amount written off. Customers who were charged more were refunded in line with the Energy Retail Code. SI/2016/51

Incorrect solar usage and export information

EWOV’s case handling highlighted that some solar customers had inaccurate electricity consumption and export index reads on their bills. The energy retailer acknowledged the issue had affected approximately 8,600 solar customers, but said there was no detrimental financial impact on them and the amount of kilowatt hours billed was correct. It said that a system fix, to be implemented by the end of March 2017, would make solar customers’ bills compliant with the Energy Retail Code. SI/2016/69

Energy marketing breaches

EWOV’s case handling highlighted instances of customers complaining about misleading and deceptive marketing, pressure sales, transfers without consent, difficulty cooling off, and door-to-door marketing despite having a Do Not Knock sticker. The energy retailer concerned said it reported four type 1 compliance breaches to the Essential Services Commission in August and November 2016. It also reported marketing issues in NSW to the ACCC. One sales channel was permanently terminated for residential sales. Another sales channel was suspended for residential sales. Several sales agents were investigated and terminated. One sub-channel was terminated permanently. The retailer said it had implemented new reporting and intelligence to better identify agents who don’t comply with its policies and/or Australian Consumer Law. A new sales incentive system was implemented to reduce complaints. All marketing and transfer without consent complaints are now referred to the National Compliance Manager for root cause investigation. Customers who complained were retrospectively transferred back to their preferred retailer without cost. SI/2016/39

Disconnection of ‘unknown’ gas customers

Via EWOV’s case handling we identified instances of customers (mainly ‘unknown energy consumers’) who had their gas supply disconnected from the street, and therefore required ‘shipper’ reconnections and longer than normal timeframes to have supply restored. The energy retailer acknowledged that remediation activities for gas ‘Dear Occupier’ accounts had resulted in more street disconnections due to no meter access. The retailer said there was backbilling, but this was completed in line with the Energy Retail Code, except for one customer whose account was overcharged due to human error. The customer was credited over $1,000 to correct the backbilling. SI/2016/62

Calculation of the Annual Electricity Concession

EWOV identified through case handling an instance where a customer did not have the full Annual Electricity Concession (AEC) applied to their bill. The energy retailer advised that it was calculating the AEC correctly. EWOV obtained advice from the Department of Health and Human Services (DHHS) about the energy retailer’s calculation. DHHS confirmed that the calculation was correct, albeit slightly less than what the customer was fully entitled to due to pay-on-time discounts. However, as noted in SI/2016/31, the customer ends up getting the full concession amount when the next bill is issued. DHHS advised that, technically, energy retailers can bill and calculate concessions in this manner, as long as customers receive a wash-up of all of the concession amounts they were entitled to, so there is no detrimental financial impact. SI/2016/46

Public submissions made by EWOV

Proposed amendments to Water Customer Service Codes New Requirements for Family Violence Policies – Draft Decision

Essential Services Commission (ESC)

EWOV supported the ESC’s proposal to update the Water Customer Service Codes. We agreed that water corporations have a critical role in assisting known victims of family violence. Under part 3.3 of the Draft Decision, the ESC proposed to make changes to the existing requirements so that billing history information is not provided where it may inadvertently risk the confidentiality of a family violence victim. In supporting this amendment, we suggested that telling EWOV why this information wasn’t made available to an account holder would help us manage any associated complaint, and prevent this information being provided incorrectly. We also suggested that any reporting framework developed by the ESC should assess whether different approaches deliver improved outcomes for victims of family violence.

EWOV’s submission online

About this ESC consultation