The ‘dodgy’ fee you won’t have to pay any more

 

POWER companies will be banned from slugging customers massive late fees as the Federal Government cracks down on "dodgy" charges.

The Australian Energy Market Commission will introduce new rules today regulating "conditional discounting" after research found nearly a quarter of residential electricity customers failed to realise their pay-on-time discounts.

 

Electricity customers will no longer be slugged massive penalties for paying their bills late after the Morrison Government introduced new rules limiting excessive charges.
Electricity customers will no longer be slugged massive penalties for paying their bills late after the Morrison Government introduced new rules limiting excessive charges.

It's estimated the average annual penalty for southeast Queensland residential customers was up to $135 a year and $510 a year for businesses.

But some penalties can reach as much as 40 per cent of a bill, costing hundreds of dollars a year and putting consumers into financial hardship.

Energy Minister Angus Taylor proposed the changes in February last year and said they would protect customers from "unfair penalties" by capping conditional discounts and fees to a retailer's "reasonable cost".

"We are protecting consumers from dodgy retailing practices and making sure discount deals are fair and transparent," he said.

"Our focus is lower electricity prices, making sure Australian consumers get the best possible deals on their energy and ensuring retailers put their customers first."

Energy Minister Angus Taylor has taken aim at “dodgy” retailing practices of power providers.
Energy Minister Angus Taylor has taken aim at “dodgy” retailing practices of power providers.

The new rules will apply to both gas and electricity retail contracts entered into after 1 July, preventing retailers from "excessively penalising" customers who sign up to discount offers and then fail to meet the strict payment deadlines.

AEMC acting chief executive Suzanne Falvi said consumer groups had supported the changes.

"We think this rule balances protecting consumers from excessive fees with retailers' need to recover reasonable costs when people don't pay on time," she said.

"Large conditional discounts that we have seen in the past are a big hit for a small consumer under financial pressure."

Retailers had fought the changes, pointing to declining use of conditional discounts, but supported the decision to not introduce a fixed cap on conditional discounts.

Electricity customers will keep the discounts they have already signed up to without having to change their existing contracts from July 1.

The Government has directed the Australian Competition and Consumer Commission to continue to monitor electricity and gas prices.



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