The Federal Court has ordered by consent that EnergyAustralia Pty Ltd (EnergyAustralia) pay penalties of $500 000 for contravening the National Energy Retail Law (NERL) by failing to obtain the explicit informed consent of customers before transferring them to new energy plans, in proceedings brought by the Australian Energy Regulator.
In the first court action taken by the AER under the NERL, the Court found that EnergyAustralia had breached the NERL by failing to obtain explicit informed consent of customers in South Australia and the ACT before entering them into contracts or transferring them from another retailer.
In her judgment, Justice Gordon said explicit informed consent "goes to the very core of stability and transparency of the energy market when considered from the perspective of consumer confidence. All participants in the industry must not only understand the central importance of the need to obtain the explicit informed consent of consumers but ensure that they have procedures in place which ensure that this is achieved.”
“Explicit informed consent is a key protection and it is critical to ensuring that customers are confident engaging in the energy market,” AER Board Member Jim Cox said.
“The AER takes any failure by retailers to meet this obligation very seriously, and will take enforcement action in appropriate cases.”
EnergyAustralia cooperated with the AER by agreeing to joint submissions on penalties and a statement of agreed facts filed with the Court, and consenting to the other orders made by the Court against them.
In separate concurrent proceedings brought by the ACCC, the Federal Court imposed penalties of $1 million on EnergyAustralia and $100,000 on its telemarketing agent Bright Choice, after finding that they had made false or misleading representations to consumers.
Background
The National Energy 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. A retailer must create a record of each explicit informed consent, which can be given by the customer in writing, verbally, or by electronic communication.
The National Energy Retail Law currently applies in South Australia, NSW, Tasmania, and the ACT. Find out more at www.energymadeeasy.gov.au.