Retirement Income

Wed, 11 Jul, 2018Melody Teh

ACCC report reveals shocking tactics used by energy companies

ACCC report reveals shocking tactics used by energy companies

The government has been urged to stop a sneaky tactic used by energy providers that costs Australian households hundreds of dollars each year.

The Australian Competition and Consumer Commission has taken aim at electricity retailers who are disguising late payment fees as “discounts” to trick people into they’re getting a better deal.

A report released today by the consumer watchdog slams the tactic whereby energy providers charge exorbitant late fees on bills under the guide of providing a discount for paying on time.

As Choice reports, “these ‘discounts’ are actually sneaky late payment fees designed to punish people so they end up paying more than they should.”

It sounds like a good deal, until you get stung.

 

Graphic illustration based on figures from an actual electricity bill.

The ACCC argues that power prices had reached “unacceptable” level and outlined measures that would save an average household $409 a year.

The damning review into the national energy market recommends a “reset” of the market and accuses energy companies of gouging customers with unnecessary and unfair costs.

Through market manipulation and misleading practices by energy providers, the ACCC said Australians were losing “hundreds of dollars a year”.

The report, commissioned by Treasurer Scott Morrison in March last year, outlines 56 recommendations that are needed to bring down prices and restore consumer confidence.

 Some of the recommendations of the report include:

• The Australian Energy Regulator should be given more powers to target market manipulation

• Discounts can often be misleading and need to be made fairer

• Customers should be able to compare discounts from a default or benchmark rate set by the regulator

• Special conditions like pay on time discounts should not operate like harsh late penalties

• Customer transfer process should be sped up so customers can move to new offers quickly

• Third-party comparator sites should declare commissions they receive

• The introduction of default offers consistent across all retailers, set at a price determined by the Australian Energy Regulator

Energy Minister Josh Frydenberg labelled the report as “an extremely comprehensive and important piece of work”.

“There is good news for consumers out of these recommendations, which the ACCC has said will reset the market and drive power prices lower,” Mr Frydenberg told Sky News this morning.

“There are 56 recommendations and the Turnbull Government will carefully consider them and we will consult with the states because a number of the recommendations have an impact on state responsibilities,” he said.

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