Retail Customer Transfer Process

by Energy Action | Nov 19, 2015
The Australian Energy Regulator says recent reports by energy retailers show a concerning increase in the number of breaches of the requirement to obtain the explicit informed consent of customers prior to them entering into market retail contracts with a retailer

Retailers must obtain a customer’s consent before transferring them from another retailer or entering a customer into a market retail contract. When obtaining a customer’s consent, the consent must be both explicit and informed.

The requirements of a customer’s explicit informed consent (EIC) are set out in the Retail Law and include:

- Ensuring appropriate systems and processes are in place to support consumers and ensure they are not transferred or entered into contracts without their EIC;

- Having systems to detect in a timely manner instances where EIC has been falsified or not obtained; and

- Having oversight and controls on the conduct of any outsourced service providers to satisfy relevant EIC provisions.

Failure to meet EIC requirements is a breach of the Retail Law and is a civil penalty provision under section 38 of the Retail Law. This means that a court may order a penalty up to $100,000 for a corporation and $20,000 for individuals per contravention.

The Australian Energy Regulator has recently issued infringement notices in NSW and SA resulting in penalties of $80 000 because it had reason to believe the retailer had failed on four separate occasions to obtain customers’ explicit informed consent before entering them into gas and electricity contracts.

In March 2015 the Federal Court imposed penalties of $500,000 against another energy retailer, for failing to obtain the explicit informed consent of 27 customers in SA and the ACT before transferring them to new energy plans.

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