Res Online 30 - February 2020

Number 30
February 2020

Res Online 30 - providing up-to-date information, statistics and analysis on energy and water complaints.

The Ombudsman's View

October to December 2019

Case issues and trends

Overall, cases for October to December 2019 were down — against both the July to September 2019 quarter and the October to December 2018 quarter. Billing remained the most common issue. Going against the trend, gas billing cases were up 1% and gas credit cases were up 5%. We think these increases were most likely linked to some systemic billing issues. We're also watching some trends that emerged in late 2019 around Best Offer and price increases. There's more information on these trends and cases in the 'On issues watch' section of this edition of Res Online.  

Providing more insights from EWOV cases

In December 2019, we published two Data Insights reports:  

  1. 'Early impact of the PDF' presents EWOV case insights and examples from the first nine months (January to September 2019) of the Essential Services Commission's Payment Difficulty Framework (PDF).
  2. 'Early impact of the VDO and Best Offer notification' presents EWOV case insights and examples from the first three months (July to September 2019) of the Victorian Government's implementation of the Victorian Default Offer (VDO) and Best Offer notification.

Other case studies in this issue

New family violence entitlements for energy customers

During 2019, the Essential Services Commission changed the Energy Retail Code to require energy retailers to have a family violence policy and meet minimum standards of conduct — including better training for frontline staff, improving account security and debt management practices. These code changes took effect from 1 January 2020. To prepare the EWOV team, we've revised our policies, processes and practices. We've also provided them with training on the new code provisions; how to assist customers presenting with family violence issues; and how to consider family violence circumstances, when finding a fair and reasonable outcome to a complaint.  

Live chat is making it easier to lodge complaints  

Always looking for ways to improve accessibility for energy and water customers, in early January 2020, we introduced live web chat to EWOV's website. Customers can now choose to interact with our Service Officers to make enquiries and lodge complaints. We're considering how live chat may be extended to contact with our Conciliators. 

Cynthia Gebert

Energy and Water Ombudsman (Victoria)

Cynthia Gebert

Energy and Water Ombudsman (Victoria)

If you have any feedback about Res Online, please contact Janine Rayner, EWOV's Communications and Policy Manager at: janine.rayner@ewov.com.au.

Overview

Issues Watch

While cases were down overall this quarter, some billing sub-issues showed increases.

Billing: Backbilling cases

We received 294 cases about backbilling in the October to December 2019 quarter, up 40% from 210 cases in the previous quarter. The increase was driven by an 80% increase in gas backbills (from 101 cases to 182 cases) largely due to one gas retailer's systemic billing error (SI/2019/39). The gas retailer explained that it had incorrectly billed customers on summer rates during winter, and then backbilled them.

Customers most commonly complained about being billed again when they'd already paid, and/or large backbills that caused them financial hardship. 

Billing: Delay cases

We received 109 cases about billing delay in the October to December 2019 quarter, up 31% from 83 cases in the previous quarter. The increase was largely driven by one energy retailer's billing problems, which saw its billing delay cases increase 213% from 8 to 25 (20 about electricity and 5 about gas). The retailer advised the problem was due to a billing system issue.

Customers most commonly complained about receiving no bills for several months. They raised associated concerns of receiving two bills at once, receiving an unusually high bill, and having payment difficulties.

Tariff: Best Offer cases  

The Best Offer Notification (introduced in July 2019) requires energy retailers to use bills to let customers know if there's a better plan available to them and how much they could save by switching to that plan. This notification must be on electricity bills at least once every 3 months and on gas bills at least once every 4 months. EWOV's fact sheet for customers explains more. 

Between November 2019 and December 2019, tariff cases about Best Offer increased from 5 to 24. As a proportion of all tariff cases, they were up from 5% to 16%.  

What customers told EWOV:

  • with contracts coming to an end, they were advised they'd pay significantly less if they switched to another type of plan -- they then found they'd lost pay-on-time discounts, or were paying more
  • not advised of Best Offer when calling to arrange connection, they asked about a cheaper plan after they moved in -- although they were told the plan they were on was the cheapest, they found cheaper ones
  • their research led them to believe that the Best Offer would increase their bills
  • they weren't told there was a cheaper plan available -- and weren't offered it as soon as that was raised with the retailer
  • told the new plan may save them up to $31.36 a year, they compared their current and new plans using the actual usage on their quarterly bill and found the new one would cost $82 more a quarter -- when they raised this with the retailer, its representative agreed with the calculations
  • they compared notes with other customers, who were also told they were on the lowest plan -- they found the plans were different
  • they were rejected for a cheaper plan because of a poor credit rating.

Tariff: price increase cases 

Between November 2019 and December 2019, tariff cases about price increases increased from 25 to 66. As a proportion of all energy tariff cases, they increased from 25% to 45%.   

Publicity around the Victorian Default Offer may have raised customer awareness and prompted complaints -- just before Christmas, the Essential Services Commission announced that it would be ''keeping a watchful eye out for retailers who are blaming large post-Christmas electricity price rises on an unrelated moderate rise in the energy safety net (the Victorian default offer)'' and that it was ''concerned at reports some energy retailers are justifying increases of up to 30% on a 7.8% rise in the Victorian default offer''. 

What customers told EWOV:

  • they signed up to two-year contracts, but their rates increased significantly during the next year -- sometimes with short notice and sometimes without notice
  • a couple of months after being told they were on the right energy plan/best possible rates, they were notified of price increases of up to 50%
  • when they queried email advice in November 2019 that electricity and gas rates would be increasing later that month, their retailer wasn't able to explain why -- and the other options they were offered were more expensive
  • after agreeing to a new 12-month contract in the last quarter of 2019, they received notification of a January 2020 price increase -- the retailer wouldn't honour the agreed contract
  • they were notified by SMS in mid-December 2019 of significant electricity price increases from 1 January 2020
  • bills increased significantly after the ownership of an embedded network changed -- the new retailer said there was nothing it could do
  • some retailers have been attributing price increases to changes in the Victorian Default Offer.

Top Issues

Case Studies

Cases by Industry

Systemic Issues

Summary of systemic issue Investigations opened and closed

October to December 2019

  Energy Water LPG
Registered 9 0 0
Closed 9 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.

Systemic issues identified through EWOV's case handling

October to December 2019

Energy

Customers transferred to another energy retailer without their consent 

Through our case handling we found customers had been signed up to an energy retailer without their consent. The retailer attributed the problem to the fraudulent entry of the customer's details — without the customer's knowledge — by a sales agent for one of the retailer's third-party marketing service providers. The retailer said it had since audited all of the accounts referred by the sales agent — as a result the third-party marketer had terminated its agreement with the agent. It said 67 affected accounts had been identified and either closed or retrospectively transferred back to the customer's previous retailer. The retailer also advised it had since enhanced its verification system to detect fraudulent applications; created a new sales governance program with revised audit, remediation, reporting and monitoring requirements; and implemented a compliance framework with its third-party service providers. SI/2018/61

Electricity bills showed estimated meter readings as actual

Our case handling highlighted that an energy retailer’s bills showed the meter reading as actual when it was estimated. We understand the issue affected eight Victorian customers — all large market customers with basic meter types. The energy retailer said it had notified affected customers, asking them to ensure the meter was accessible for a reading. It said it had also changed its billing system to ensure that substituted data and estimated reads were correctly shown on bills. SI/2019/10

Notice of rate changes

Our case handling highlighted that customers of an energy retailer weren't notified about rate changes in line with their contract terms and conditions. The retailer was required to give them 30 days’ notice of a rate change, and it didn't do so when it changed rates in January 2019. We understand 44,585 customers were affected. The retailer said it had provided some 3,600 customers — who contacted it within 30 days of the notification of the rate change — with a $50 account credit. It undertook to give all remaining customers at least 30 days' notice. SI/2019/12

Errors in processing direct debits 

Our case handling highlighted errors in how an energy retailer was processing direct debits from bank accounts. In one case, the whole bill was deducted rather than the agreed instalment. In another case, two direct debits were deducted where a payment had been missed. The retailer attributed the first to employee error — advising it had since retrained the consultants involved and updated its process map. It said it had addressed the double-debiting with a system upgrade — to ensure that, in future, customers who miss a payment are contacted with options for making the missed payment up. SI/2018/25

Overpayment of energy concession entitlements

An energy retailer advised that, following a system change in early 2019, some customers had been overpaid their concession entitlements. We understand around 9,000 customers were affected between March 2019 and July 2019. The retailer said 5,601 customers were notified of the error, provided with an apology and sent revised bills, with information on how they could request extra time to pay. Some customers, including hardship customers, were excluded from remediation activities and not issued with new bills. The retailer also advised that a system fix had since addressed the issue. SI/2019/36

Refunds in error   

Our case handling revealed that an energy retailer had provided refunds in error during reversal and re-billing of accounts. The energy retailer reviewed each account identified by EWOV. It attributed the error to its employees not following its practice guidelines for processing refunds. It said feedback and coaching would be provided, and that it was also reviewing its practice guidelines training and materials. SI/2019/37

Backbilling of summer gas rates  

Our case handling highlighted that customers of a gas retailer were incorrectly billed on summer rates during winter, and then backbilled. We understand just under 55,000 customers were affected. The retailer said the problem arose when the winter gas rates in its billing system didn't roll over from the previous year as they should have. It said it had set up a customer hotline, sent written apologies to affected customers, and provided account credits. It said it had also amended its price change process to ensure rates changes occur at the appropriate time — even where rates are unchanged from the previous year. SI/2019/39

Billing delays related to Best Offer

An energy retailer notified us of billing delays for around 270 customers with whom it had multiple previous payment agreements. The retailer said it had put a hold on the accounts of these customers, because it was unable to display the Best Offer message on their bills. It said it had informed the customers of the billing delay — as needed, they would be offered an extended period to pay or a payment plan. The retailer also advised that a system fix had since addressed the issue, and the bills had been sent. SI/2019/41

Accounts set up even though the prospective customer failed a credit check

Our case handling highlighted an issue around the setting up of energy accounts. When a prospective customer failed a credit check, an existing customer (a relative) was contacted by the retailer's agent and asked to set the electricity and gas accounts up for them — on the understanding that the accounts would revert to the new customer once they were active. The energy retailer said its agent had acted outside standard documented process. It said feedback had been provided to the agent and the team manager, and it would be reminding its sales teams about standard documented process requirements. SI/2019/44

Public submissions made by EWOV

October to December 2019

Draft Registration Guideline for Exempt Persons Version 2

Essential Services Commission (ESC)

We expressed EWOV's support for the guidelines noting that, in their totality, they will significantly improve the Registration Guidelines for Exempt Persons. However, we also raised concerns the revised glossary proposed that 'meters' be removed from the definition of electricity network and embedded network, in favour of 'switchboard'. We explained and sought the ESC's views on our concerns that this proposed amendment may throw some doubt on EWOV's capacity to investigate complaints about embedded network meters.

EWOV's submission online 

ESC's draft guideline

Consumer Data Right – Draft Privacy Safeguard Guidelines

Office of the Australian Information Commissioner (OAIC)

This submission provided the joint feedback of the energy and water Ombudsman schemes in Victoria, New South Wales, Queensland and South Australia. In terms of privacy, we agreed that the Consultation Draft did an excellent job of comprehensively and clearly outlining the expectations of the OAIC in relation to the privacy safeguards set out in Division 5 of Part IVD of the Competition and Consumer Act —thus providing a clear roadmap for relevant parties navigating their use of data under the Consumer Data Right (CDR) to help them fully comply with their privacy obligations. We suggested that a comprehensive 'frequently asked questions' (FAQ) guide could be a useful addition.

Joint Ombudsman submission online

OAIC consultation online

Glossary

Find out more about EWOV's issue and complaint terminology.