Explicit informed consent is a fundamental consumer protection under Victorian energy law. It requires retailers to meet specific obligations to ensure customers understand the transaction they are entering into and that customers clearly provide their consent to that transaction. Consumers should not be signed up to energy contracts without their fully informed agreement.
Essential Services Commission chairperson Kate Symons says explicit informed consent is a key energy compliance and enforcement priority for the regulator, and critical to customers being confident, informed and empowered to effectively engage in the energy market.
“Customers must be properly informed about an energy plan and must give their explicit consent to enter a contract or transaction for that plan. Failure by retailers to obtain this consent impacts public trust in the sector to act fairly and in good faith to deliver essential gas and electricity services to Victorians,” Commissioner Symons said.
“Our investigation into these alleged breaches highlights our concerns that customers aren’t being given clear, correct, and complete information about energy contracts, or enough opportunity to ask questions of retailers. Industry must do more to train staff and improve their communications to facilitate informed customer consent and uphold this important consumer protection.”
Commissioner Symons says future enforcement of explicit informed consent breaches will reflect the commission’s recently expanded powers, including increased enforcement tools, investigative powers and pathways to commence civil legal action.
“EnergyAustralia, Red Energy and Lumo Energy have admitted the alleged conduct was likely to have contravened the Energy Retail Code on these occasions. They have remediated affected customers. We accepted the court enforceable undertakings the retailers have offered to give the commission close oversight of their compliance improvement action plans, and increased monitoring of their processes to obtain customer explicit informed consent. This is a legally binding obligation and we expect full cooperation and compliance from the retailers on these matters.”
The alleged contraventions predated the legislative amendments which took effect on 1 December 2021 and provided the commission with broader enforcement powers. The commission now has greater enforcement options available to address non-compliance with Victorian energy laws. These include enforceable undertakings, penalty notices, civil penalty litigation and criminal prosecution for some contraventions. The commission assesses each case when determining the most effective enforcement option to address non-compliance and facilitate improved outcomes for Victorian energy consumers.
The commission reviewed this matter in accordance with the enforcement and penalty regime in place at the time the alleged conduct occurred.
“I remind industry that future breaches of the explicit informed consent obligations are subject to significantly increased enforcement action. In addition, the Energy Retail Code of Practice specifies further obligations that we can enforce. We will not hesitate to take action where we find retailers do not obtain explicit informed consent from customers to proceed with contracts and transactions,” Commissioner Symons said.