The five fibs of energy marketing

Written on the 26th of July 2010 by Michael Crandon MP

Misleading energy marketing continues to be a problem in south east Queensland, according to Energy Ombudsman Barry Adams.
“Energy Ombudsman Queensland (EOQ) has seen a significant increase in marketing complaints since March 2010,” said Mr Adams.
“Between March and June we investigated, on average, 27 complaints a week about marketing conduct and investigators have found five common statements that are used by door-to-door salespeople to get people to sign energy contracts.
“To help people sort fact from fiction, EOQ has released the top five fibs.”
Number one: ‘I’m here to ensure you’re getting an area discount’.
“While discounts can be available on different energy contracts, it is misleading to say a particular location will receive a discount,” said Mr Adams.
Number two: ‘We’re government-owned and you must sign with us’.
“Consumers do not have to sign with any energy retailer if they choose not to,” Mr Adams confirmed, “It is misleading to state otherwise.”
“It also falsely gives a reputable impression suggesting a retailer is government-owned.
“There are New South Wales-government owned retailers operating in Queensland, however Ergon Energy is the only retailer owned by the Queensland Government and it does not provide market contracts to residential customers.”
Number three: ‘Sign here so the boss knows I’ve called on you’.
“Consumers need to check what they are actually signing as it may be a contract,” Mr Adams said.
“The terms and conditions of the contract, including any fees and charges, must be explained before a contract is agreed to. If this is not done, then it is a breach of the Marketing Code of Conduct.”
Number four: ‘Sign here for a written disclosure statement’.
“If someone has signed a document at the door and then receives a written disclosure statement – they’ve signed a contract,” warns Mr Adams.
“Under the Code, energy retailers must send a written disclosure statement after agreeing to a contract.”
Number five: ‘If you don’t sign with me there will be wires on the other side of the street’.
“It’s bad enough there is a threatening tone to this statement but energy retailers have nothing to do with the poles and wires that bring electricity to homes,” said Mr Adams.
“It is the energy distributors, such as ENERGEX and Ergon Energy, that maintain or install the poles and wires and they must give written notification of any maintenance work in the area.”
Mr Adams said misleading marketing conduct was unacceptable and breaches the Marketing Code of Conduct for energy retailers.
“If consumers have ever come across these statements, or something similar, they need to contact the energy company the salespeople represent first,” he said.
“Energy retailers need to know what is happening with their sales staff and consumers can ask for contracts to be terminated without penalty.
“If there is no resolution, contact EOQ and we will investigate any complaints.
“Our investigations have resulted in successful outcomes, including the termination of employment or re-training of marketers responsible for making false and misleading statements and the cancellation of contracts that were signed under coercion with no penalty to the customer.”
Queensland consumers can contact Energy Ombudsman Queensland on 1800 662 837 or at www.eoq.com.au.

Regards
Michael Crandon MP
Member for Coomera