The Australian Energy Regulatory (AER) is developing a Customer Hardship Policy Guideline to improve protections for energy customers experiencing hardship.

The consultation has been initiated in response to concerns about the lack of consistency and clarity in retailer hardship policies and therefore customer outcomes. QCOSS has actively participated in this consultation and has made two submissions so far as well as attending a forum hosted by the AER.

QCOSS’ position

Through our community engagement QCOSS has found that energy retailers have established hardship policies that pay lip service to the law, but their actions are contrary to the purpose and spirit of the hardship provisions. We have identified through our research and conversations with the community sector that energy retailers are not supporting customers experiencing payment difficulty and that the following issues are common:

  • barriers to access hardship programs
  • retailers allowing customers to accumulate high debts before offering, or without offering, assistance
  • creating unsustainable payment plans
  • failing to identify and discuss concessions
  • not putting customers experiencing payment difficulties on the best deal
  • not allowing customers to switch to another retailer until they have paid off their debt
  • threatening of, or actual, disconnection as a debt collection strategy without offering tailored advice and assistance under their hardship program
  • unfair barriers to getting reconnected.

It is our view that the overall customer framework is not fit for purpose and remains in need of major overhaul. These proposed guidelines are a temporary fix to a system in urgent need of rethinking.

Our key position remains that:

  • access to hardship support is a priority and the key effect of the new guidelines and standardised statements should be to ‘widen the door and lower the bar’ for customers who need hardship support;
  • there is often no discernible difference between a customer experiencing payment difficulty due to hardship and a customer having difficulty paying for any other reason, and attempts by retailers to distinguish between them are undermining the intent of hardship policies;
  • the broader guidelines (not just the standard statements) are crucial and it will be important to include strong general principles and specific outcomes in both the guidelines and the statements designed to give effect to them;
  • the AER should interpret the rule as enabling them to include specific action statements in their guidelines to improve outcomes for customers experiencing payment difficulties due to hardship.

QCOSS believes that electricity is an essential service and as such, disconnection should never be an option for customers who are unable to pay. Retailers should take all steps necessary to ensure consumers are provided with all assistance necessary to help manage their financial difficulties including forgiveness of debt that is clearly unable to be repaid.

QCOSS submission on standardised statements

QCOSS submission to AER on hardship guidelines

5 March 2019 | Focus area: