Simply Energy pays $80 000 in penalties for alleged failure to obtain explicit informed consent

IPower Pty Limited and IPower 2 Pty Limited (IPower), trading as Simply Energy, has paid penalties of $80 000, following the issue of four infringement notices by the Australian Energy Regulator (AER).

The AER issued the four infringement notices in NSW and SA because it had reason to believe that Simply Energy had failed on four separate occasions to obtain customers’ explicit informed consent before entering them into gas and electricity contracts.

In four separate instances in 2013 and 2014, sales consultants representing Simply Energy made unsolicited telephone calls to consumers intending to switch them from their current energy retailer to Simply Energy. In each case, they spoke to vulnerable consumers, including an 88 year old with hearing difficulties and a 14 year old.  In the AER’s view, it was apparent from each of these conversations that the consumers did not fully understand the purpose of the call. Despite this, the consumers were transferred to Simply Energy contracts.

 “Retailers must ensure that consumers fully understand the energy offer being made to them and that they are able to give informed consent to  enter into that contract.” AER Chair Paula Conboy said.

 “The requirement to obtain explicit informed consent from customers is an important protection under the National Energy Retail Law,” Ms Conboy said.

Simply Energy reported these incidents to the AER pursuant to its reporting obligations under the Retail Law and National Energy Retail Rules (Retail Rules).

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Retail Rules.  The AER can issue an infringement notice where it has reason to believe a business has contravened a civil penalty provision of the Retail Law or 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 Law requires a retailer to obtain the explicit informed consent of a customer to transfer the customer to a new energy retailer, or to enter the customer into a market retail contract.

In order for a customer to give their explicit informed consent, a retailer, or a person acting on their behalf, must clearly, fully, and adequately disclose all matters relevant to the customer’s consent, including the purpose or use of the consent.

In March 2015 the Federal Court imposed penalties of $500 000 against another energy retailer, EnergyAustralia Pty Ltd, for failing to obtain the explicit informed consent of 27 customers in SA and the ACT before transferring them to new energy plans.

IPower Pty Ltd and IPower 2 Pty Ltd are two entities operating in partnership to trade as Simply Energy.

Sector: 
Issued date: 
9 November 2015
AER reference: 
NR 20/15
Contact: 
AER Media inquiries 1300 138 917