Energy companies not doing enough to help indebted households

The Essential Services Commission’s (ESC) annual review of Energy retailers’ customer service performance is damning of the industry’s ability to assist struggling households. The Consumer Action Law Centre says the report paints a picture of an industry that is failing to identify customers in hardship despite year on year price rises and well documented consumer concern.  Instead, these figures seem to suggest the industry sees cutting energy supply as an acceptable debt collection tool, and doesn’t understand the responsibilities that come with providing essential services.

‘The ESC’s report shows a 33 per cent increase in electricity disconnections and 50 per cent increase in gas disconnections. 1 in 100 Victorian households have had electricity disconnected in the last year, which we see as unacceptably high. But equally concerning is that participation in hardship programs has dropped—less than 0.5 per cent of customers get access to a hardship program—and the ESC’s figures suggest that many people are being disconnected before they’ve even accessed affordable payment plans,’ said Gerard Brody, Director of Policy and Campaigns at Consumer Action.

‘Disconnection from these essential services should be a last resort and, in our view, no one should be disconnected before they’ve been offered payment assistance. The data shows that almost half of disconnections are reconnected at the same address in the same name within seven days, indicating that disconnection is being used to resolve payment issues. Retailers should be proactively identifying households that are having payment difficulties and telling them about their payment options, but these figures cast significant doubt on retailers’ willingness to do so.’

Through its legal practice and financial counselling service Consumer Action speaks with hundreds of Victorians struggling to pay their bills and, unfortunately, an inability to pay for utilities is often an indication of greater financial or social vulnerabilities.  Earlier this year, Consumer Action published a report detailing experiences of consumers who had their accounts referred to external debt collectors by energy retailers, and now more evidence is coming to light about high levels of disconnection. Consumer Action believes utility companies should be working with households to ensure they maintain access to essential service because disconnection adds greater pressure to marginalised households.

‘Energy suppliers have a captive audience, we all need an energy retailer, but retailers need to understand that, as participants in this market, they have a responsibility to facilitate payments without using disconnection as a heavy handed incentive. In the first instance they should be offering affordable payment plans—many consumers don’t understand that they’re available so it falls on the retailers to get on the front foot and offer the assistance,’ said Mr Brody.

‘The message to energy retailers from this report is stark—they’re not doing enough to help struggling households. Disconnection is the last option, not an everyday tool for collecting on overdue accounts.

Victorians struggling with utility payments or other bills can speak to a free, independent and confidential financial counsellor by calling 1800 007 007.

2 Comments on "Energy companies not doing enough to help indebted households"

  1. Great that the ESC produces this comprehensive report that goes down to individual retailer level and that Consumer Action is using it to advocate for improvements in the quality of service provided by retailers, especially for customers having difficulty paying their energy bills. Unfortunately, Queensland advocates can not do the same because a similar report is not produced for Queensland – despite our requests that this be done.

  2. Great that the ESC produces this report and that Consumer Action is using it to advocate for retailers to improve the quality of service provided, especially for customers having difficulty paying their energy bills. Unfortunately, Queensland advocates can not do the same because ano such detailed report is produced for Queensland so far we have failed despite numerous attempts to the effrots of consuerm advocates

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