Many companies offer energy contracts with a discount that lasts for a set amount of time – say, a year. Afterwards, the company may reduce or stop giving the discount. In the industry jargon, the period when the discount is given is known as a ‘fixed benefit period’.
Companies often contact customers to remind them that their fixed benefit period is about to end – but until this month, it wasn’t a requirement. The rules have now been changed, making these reminders compulsory.
The new rules
Under the new rules, your company has to write to you 20 to 40 days before your fixed benefit period ends. If your discount (or another type of benefit) is changing, the company must tell you what the change is and when it will happen. They also have to tell you about any early termination fees in your contract, and remind you that you can look for other offers on the Victorian Energy Compare website.
The Essential Services Commission, Victoria’s energy regulator, made this change to bring Victoria into line with recent changes to the national rules. The aim is to give customers a chance to think about their options and look for a better deal if they wish to. It’s all part of ongoing efforts to create a competitive energy market and keep prices down by encouraging consumers to shop around.
What customers tell EWOV
Over the past eighteen months, we’ve been receiving more and more complaints from customers who say that they’re dissatisfied with changes to their contract terms, including a few from customers upset about losing their discounts after the fixed benefit period ended. Overall, complaints about contract terms show that a lot of people are confused when it comes to the fine print about how companies can change prices and discounts. It’s a problem that can be made worse by incorrect or inadequate marketing information.
While the new rule won’t solve all of the issues, EWOV welcomes any steps that could help consumers to understand their energy contracts and make more informed decisions about them.