AGL pays $60,000 penalty for failing to inform customers of contract end

AGL South Australia Pty Limited (AGL SA), AGL Sales Pty Limited (AGL Sales) and AGL Retail Energy Limited (AGL Retail) have paid penalties totalling $60 000 in response to infringement notices issued by the Australian Energy Regulator (AER).

The AER issued the infringement notices alleging that, between 2013 and 2017, AGL failed to notify more than 1000 customers across NSW, SA and QLD that their fixed term retail contracts were due to end.

The National Energy Retail Rules (Retail Rules) require that retailers inform customers in writing about their options at the end of any fixed term contract, such as setting up a new contract or moving to another retailer. Importantly, retailers must disclose what happens if they choose to not enter into a new contract with their current retailer.

“I am particularly concerned that by not telling customers that their retail contracts were due to end, AGL failed to provide customers with time to look around for a better energy deal.

“These requirements of the Retail Rules are important safeguards to ensure customers are fully informed and able to make active choices of their retail energy supplier,” said AER chair Ms Conboy.

Recent changes to the Retail Rules mean customers who sign up to an ongoing contract that has a specified benefit period must also receive notification when that benefit is ending or changing. The AER will be closely monitoring retailers’ compliance with this new requirement to ensure customers get the benefit of the new rule.

Consumers can use the AER’s Energy Made Easy (www.energymadeeasy.gov.au) price comparator site to find the best retail offer for their individual or family needs.

“Energy Made Easy is a vital source of information for customers looking for a better deal. It contains all generally available offers from all energy retailers in a specific area.

“Significant savings can be made , especially if customers are nearing the end of a fixed term contract or a benefit period. This makes it even more important that retailers meet their obligations to notify customers at that time,” Ms Conboy said.

The payment of a penalty specified in an infringement notice is not an admission by a business of a contravention of the Retail Rules.

Background

The Retail Law and Retail Rules (which apply in New South Wales, the Australian Capital Territory, Tasmania, Queensland and South Australia) set out key protections and obligations for energy customers and the retail and distribution businesses they buy their energy from.

The Retail Rules requires retailers to notify customers on a fixed term market retail contract that their contract is coming to an end between 40 and 20 business days before the end date of the contract.

The notice must include:

  • the date on which the contract will end;
  • details of the prices, terms and conditions applicable to the sale of energy to
  • the premises concerned under a deemed customer retail arrangement; and
  • the customer’s options for establishing a customer retail contract (including the availability of a standing offer).

This rule promotes competition and ensures that customers are able to actively seek out potentially better offers in the market after the fixed term market retail contract has expired.

Customers seeking information about the offers available to them can use the AER’s price comparator website, Energy Made Easy, to look at the energy deals in their area (excluding WA and NT). For Victoria, customers can use Victorian Energy Compare and both are designed to help customers make informed choices about energy offers.

Issued date: 
7 February 2018
AER reference: 
NR 03/18
Contact: 
AER Media inquiries 1300 138 917