Cracking down on sneaky late payment fees

The Hon. Angus Taylor MP

Minister for Energy

The Morrison Government is cracking down on sneaky late payment fees charged by energy retailers to customers who have failed to meet discount conditions, through a rule change submitted to the Australian Energy Market Commission (AEMC).

In an effort to secure a customer’s business over one of their competitors, retailers offer large discounts which can be up to 45 per cent off a customer’s bill. These discounts are only provided if certain conditions are met, such as paying on time. However when a customer fails to meet these conditions, they are often charged hefty late payment fees and are faced with a significantly higher energy bill than expected.

The Australian Competition and Consumer Commission found on average one in four customers failed to meet the conditions to receive their discount. This figure increased to nearly 60 per cent for customers in financial hardship.

For an average household, customers who may only miss one payment due date can, per year, pay anywhere up to:

  • $1,000 more in New South Wales
  • $600 more in South Australia
  • $500 more in Queensland

The rule change will limit conditional discounts for both gas and electricity retail offers to reasonable costs.

Under the proposed rule change, retailers would also be prevented from hitting customers twice with a late payment fee and withdrawing pay-on-time discount.

This rule change will not only reduce confusion for families and small businesses but also enable them to make more empowered and informed decisions about their energy plan.

The Morrison Government is getting on with the job of delivering more affordable, reliable energy for families and small businesses. This proposed rule change builds on action already taken to protect customers, including:

  • Banning retailers from offering confusing discounts;
  • Ensuring vulnerable customers who are experiencing financial hardship get the help they need to pay their power bills;
  • Requiring energy retailers to notify their customers when their discounts are about to finish or change; and,
  • Requiring retailers to accept self-meter reads instead of estimated reads so customers are accurately charged.

The Morrison Government is committed to protecting Australians households and small businesses from high energy bills, ending the dodgy practices and rip offs in the energy sector.

/Public Release. View in full here.