Draft determination
- the proposed Scheme did not hold energy retailers sufficiently accountable for the actions of the agents they employ
- the sanctions applicable for breaches of the proposed Scheme were not considered sufficient to remove incentives for both sales agents and energy retailers to engage in unfair selling practices to maximise their financial interests
- the information provided to consumers about their legal rights fell short of existing regulatory obligations, and may confuse consumers about their rights.
For further details regarding the Scheme and the ACCC's draft determination please see our eAlert from 5 May 2011 entitled "ACCC rejects energy retailers' marketing scheme".
Final determination
The ACCC is satisfied that the revised Scheme addresses its previous concerns and is likely to achieve public benefit by increasing compliance with door-to-door energy sales laws and lessening the impact of aggressive sales practices.
Key factors in the ACCC's decision to grant authorisation include that the revised Scheme:
- imposes more suitable sanctions on sales agents and energy retailers to create incentives for compliance with the Scheme
- offers increased clarity and transparency surrounding sanctions and procedures which apply to breaches of the Scheme, including appropriate public reporting obligations
- achieves consistency with other legal obligations regarding door-to-door energy sales, for example in relation to information required to be provided to consumers, which will reduce the opportunity for consumer confusion
- provides greater guidance in relation to non-compliance with the Scheme, including in relation to the categorisation, identification and investigation of breaches
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contains mechanisms for enabling customers to be aware of their rights and the obligations of sales agents under the Scheme.
Although its final determination is ultimately supportive of the revised Scheme, the ACCC notes that the effectiveness of the Scheme is yet to be established. Accordingly, the ACCC has only granted authorisation of the Scheme for three years (rather than the 10 years sought by Energy Assured Limited). If re-authorisation is sought at this point, the ACCC will review the effectiveness of the Scheme and its relationship with other relevant laws before determining whether re-authorisation is warranted.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
