Consumer care should not be optional

“They need to be mandatory - 100% - so we have actually some rights to call up and ask why it wasn’t followed” - Financial mentor

In 2007 an Auckland woman died after a retailer disconnected her power over an unpaid bill. She was dependent on electricity for her oxygen machine. After this tragic event, retailers paid far greater attention to consumer care, especially the disconnection process and treatment of medically-dependent customers. But the Electricity Commission (forerunner to the Electricity Authority) did not put mandatory rules in place.

Fast forward to July 2021, the Electricity Authority brought in new ‘Consumer Care Guidelines’, developed with extensive input from retailers. They cover important matters including how to treat people medically-dependent on electricity; minimum steps to prevent disconnections; fair fees and communication. The Electricity Authority made the Guidelines voluntary, with no penalties. Consumer advocates expressed concern, but retailers assured everyone that they would take the Guidelines seriously.

In 2023 the Electricity Authority published a review of whether retailers were following the Guidelines. Half the companies said yes, they did follow them. The other half of companies (48 per cent, serving one in three households) either admitted they did not fully follow the Guidelines, or did not even respond to the Electricity Authority with a self-assessment (which in itself is encouraged in the Guidelines). That meant that one in three New Zealand households was buying power from a retailer that did not follow the accepted minimum standards of consumer care.

Retailers’ failure to follow the Guidelines has been causing harm. Some retailers are billing people incorrectly and leaving them out of pocket; failing to tell customers of other cheaper plans or meter configurations; not being transparent about fees; or not helping clients to prevent accumulating debt. Some retailers are disconnecting households without taking steps to find alternatives. While customers can complain to Utilities Disputes (a mediation service) and get some money back, this creates little incentive for retailers to improve their wider practices. It is also unrealistic to expect customers in hardship to have the time and emotional energy for this process.

Finally in January 2024, the Electricity Authority announced it will mandate the guidelines by 1 January 2025. This will mean that for the first time there are actual rules requiring companies to protect consumers, and penalties if they do not.

We are calling on the Electricity Authority to ensure these new rules are strongly worded and properly enforced.