EnergyAustralia penalised $1.5m for failing to protect hardship customers

EnergyAustralia has been ordered to pay $1.5 million in penalties after the Federal Court declared the retailer breached energy laws when it wrongfully disconnected eight customers who were in financial hardship, having failed to extend legal protections to those customers.

Australian Energy Regulator (AER) Chair Clare Savage said energy is an essential service and wrongfully disconnecting any customer, in particular vulnerable customers experiencing hardship, is unacceptable given the severe impact and stress it causes.

“There are clear laws in place requiring all energy retailers to give extra protection to customers who are in financial hardship.”

“The penalties imposed by the Federal Court should send a clear signal to every energy retailer about the importance of complying with their obligations under these hardship laws.”

EnergyAustralia admitted that it breached its obligations to protect eight customers who were residents in New South Wales, Queensland and South Australia and were experiencing financial hardship.

The breaches admitted by EnergyAustralia included:

  • failing to maintain and implement EnergyAustralia’s hardship policy
  • failing to inform customers of its hardship policy 
  • failing to provide customers with the opportunity to enter into appropriate payment plans 
  • failing to offer and apply a reasonable and manageable payment plan
  • wrongfully disconnecting customers experiencing financial hardship.

“As a matter of priority we will continue to monitor energy businesses compliance with hardship obligations, and take enforcement action where appropriate” concluded Ms Savage.

“I also want to remind customers who are doing it tough to talk to their energy provider so they can access the support and protections they are entitled to by law. Speak to your energy ombudsman if what is offered isn’t right for your circumstances."

The AER recently emphasised through its Statement of Expectations 3 the need for retailers to ensure that customers currently on deferred debt arrangements are transferred to sustainable payment plans or even hardship programs where appropriate.

Notes to the editor

Retailers must comply with the AER’s Customer Hardship Policy Guideline when submitting new or varied customer hardship policies.

Issued date: 
6 November 2020
AER reference: 
NR 38/20
AER Media 0466 409 921