Red Energy pays $254,436 in penalties over alleged breaches of customer ‘best offer – could you save money on another plan’ rules

Red Energy Pty Ltd (Red Energy) has paid $254,436 in penalties for allegedly communicating incorrect best offer information to 30,982 customers, including customers who were on concessions and payment assistance, over a two-week period in 2022. Red Energy also allegedly failed to provide 15 customers with any best offer information on their bills within prescribed timeframes, over a period of three years (2019-2022).

An energy retailer’s best offer is typically the cheapest generally available offer and does not include one-off gifts or sign-up credits. It’s based on how much energy a customer has used over the past year. In Victoria, energy retailers must regularly communicate to customers via their energy bills – every three months for electricity bills, and every four months for gas bills – if the customer is on their best offer, and how much money they could save by switching if a better offer is available. Customers can also ask their retailer for best offer information at any time.

“In these matters, customers were deprived of critical information they are entitled to under Victorian energy rules to help them to make informed decisions about what energy plan best suits their needs. The commission regards the impact of these alleged breaches to Red Energy’s customers and to consumer trust in the sector more broadly, as significant,” said commissioner and chairperson Kate Symons.

She said the commission is focused on compliance and enforcement priorities that support Victorian consumers to navigate the energy market with confidence.

“Retailer obligations that provide customers with clear, timely and accurate best offer information are even more important in an environment of higher energy prices. We know only 1 in 2 Victorian residential customers took up their retailer’s best offer last financial year, leaving millions of dollars in potential bill savings on the table as a result.

“Making sure retailers follow rules around communicating their best offers to customers increases transparency and consumer confidence in the energy market. This is critical to building consumer trust and engagement in the market so that they can find a better value energy offer.”

Red Energy self-reported the alleged breaches in accordance with its legal obligations. The retailer promptly issued a corrective letter to the 30,982 customers affected by the allegedly incorrect best offer information.

As part of the commission’s compliance program for this important consumer protection, it is developing a guideline for retailers to help them improve how they communicate best offer information and make it easier for customers to seek a better value plan.

“We continue to monitor energy companies to make sure they meet their obligations to their customers and uphold the strong energy consumer protections we have in this state. Where we find evidence that an energy company has not done the right thing by its customers, we take action,” Commissioner Symons said.

The commission can issue penalty notices where it has reason to believe a business has contravened a civil penalty requirement. Payment of a penalty notice is not an admission of a contravention of a civil penalty requirement.