We spoke to electricity and gas customers and their representatives about their experiences with Victorian energy retailers to find out how our reforms are affecting consumers.
Customer experience reporting
What we did
We researched customer experiences following regulatory reforms to the energy market. This includes:
- the Payment Difficulty Framework, which was implemented on 1 January 2019
- energy retail market reforms, implemented on 1 July 2019
- baseline reporting on assistance for customers affected by family violence, as a bench-marking exercise before family violence amendments to the Energy Retail Code come into effect on 1 January 2020.
These regulatory reforms are part of our new responsibility based approach to regulation, including our response to recommendations from an independent bipartisan review of electricity and gas retail markets and the Royal Commission into Family Violence. We interviewed financial counsellors (including specialist family violence financial counsellors), community workers and volunteers, as well as Victorian energy consumers, to find out how recent reforms have worked in practice for energy consumers. Some of these findings were also published in our 2018-19 Victorian Energy Market Report.
Summary of findings
The overall response to consumers has been mixed
Financial counsellors and consumers said there was broad variation in responses, depending on their retailer. Customers and their advocates experienced better support from larger retailers, which were perceived as having better systems, resources and training. While customers and their advocates noted that some smaller retailers are offering more options and flexibility, some customers still experienced poor responses when seeking assistance for having trouble paying their bills depending on the retailer.
There is an awareness that things are changing in the market
Customers and financial counsellors noted that customer service staff are providing best offer information, and that customers are increasingly being offered suitable payment arrangements. Financial counsellors noted that since the regulatory changes have come into effect, they have not been challenged as much on their advocacy for customers. We also heard that while responses to customers affected by family violence are not always sensitive or appropriate, there have been instances where customers affected by family violence have been offered measures to protect their personal information by their retailers.
Disconnections are less common
Financial counsellors believed that there were fewer disconnections since January 2019, and that the practice seems to be discouraged following the introduction of the Payment Difficulty Framework. However, customers and their advocates reported that even though they weren’t being disconnected, they were still being threatened with disconnection when they were having difficulty paying their bills.
Quotes from customers
‘I think they’re easier [to communicate with]… They send you emails—your prices have gone up a little bit... and then if you ring, somebody does answer you straight away. They don’t put me on hold.’
'It was good. The person I did talk to they were actually really good. They were trying to figure out a way of paying my bill which was affordable for me…I said the best I can do is $60 a fortnight and they said they would go and talk to one of the managers from the electricity company and they said it was fine as long as I keep up to date with my fortnightly payments.'
‘[I was threatened with disconnection] only when I couldn’t pay... Because before I didn’t realise you could get assistance and I was thinking ‘How am I going to pay this bill?’ And then a letter came in the post saying you haven’t paid your bill. If you’re not paid in such and such a time then we’ll cut off your electricity...’
Quotes from financial counsellors
‘I guess [consumers] do know they can contact them, but whether they do is another question—I think they still feel extremely intimidated by the retailers and feel that they don’t get heard.’
‘I’d say in the past 6 months, I’ve seen an improvement... [previously] it just felt like the customer or myself against the utility providers... But they’re actually offering now better service options, ‘We can do this, What about that?’ Whereas before there wasn’t that friendliness about it at all...’
‘I’ve been very surprised—actually disappointed—about some of the providers' responses to clients who are having difficulty paying. I thought... that [following the changes] the utility providers were supposed to be considerate and fair, consider their situation, and provide further options for a person to meet their obligations.’
‘Definitely, definitely [customers] are [threatened with disconnection]. Though they get warning and they get a disconnection letter, or through emails they’ll get that. But... we’re not getting as many as we were.’
‘I did get one really good outcome... [The energy retailer] was amazing. It was a very vulnerable client... They initially were pushing back. But, in the end, they really came through with the goods and they gave this particular client a specific case worker so that every time she rang up she would be put through to that same case worker... And they also offered to go into her home and to do an energy audit. And they waived the debt. But they also wanted to assist her with her account moving forward, and I think that’s the best outcome you could get.’
‘I used to see quite a lot [of disconnection notices] prior to the first of July, but in all honesty, I haven’t seen any since then, it’s not something that’s encouraged. Definitely improved with that because they know damn well that you know a client can just go to EWOV...’
Key lessons from the research
More work needs to be done
We understand that implementation takes time. While there have been some excellent of examples of customers and their advocates receiving assistance in line with the new standards, there was inconsistency between experiences. For instance, while some customers and their advocates were supported to choose payment plans that worked for them, others felt pressured or confused by their retailers. There is still much work to be done by retailers to practice consistent compliance with our regulatory reforms. Meanwhile, we’ll keep listening to the voices of Victorian consumers to understand how these reforms are supporting retailers to provide more effective and appropriate outcomes, and how future regulatory reforms can continue to support the long-term interests of Victorian energy consumers.
These findings are consistent with other reports on the energy market
As outlined in our 2018/19 Victorian Energy Market Report, retailer data shows six months of lower disconnections. From January to June 2019, 15,545 fewer customers were disconnected for failing to pay their bills. Similarly, the Energy and Water Ombudsman’s (Victoria) (EWOV) data shows electricity credit cases were down 25 percent from 2017/18 and down 60 percent from four years ago. Consumer Action Law Centre’s (CALC) report on the impact of the Payment Difficulty Framework also shows a reduction in calls to the National Debt Helpline from people with very large bills and fewer inappropriate referrals since the new regulations were introduced. Our report on customer experiences of the energy market largely supports these findings.
Consumers face ongoing challenges that require ongoing consideration
No two consumer experiences are exactly alike. There are many intersecting life circumstances that can make a consumer’s interactions with their retailers more difficult. We have heard that customers who speak languages other than English at home are experiencing ongoing barriers to accessing support from their retailers. This was also highlighted in CALC’s report. We heard that customers are still commonly referred to a financial counsellor before being offered assistance by their retailers, further complicating the process and compounding stress for customers already experiencing vulnerability.