An Australian owned electricity and gas retailer has copped a fine for using marketing methods that are banned in the state of Victoria, including cold-calling customers and making “win-back” offers.
Victoria’s Essential Services Commission said on Monday that CovaU Pty Ltd (trading as CovaU) had been fined $341,724 for alleged unlawful cold-call telemarketing that targeted former customers and offered short-term discounts to entice them back.
The ESC alleges that between February 2023 and March 2024, CovaU contracted a third party to use the marketing measures that have been ruled out to protect energy consumers from high-pressure sales tactics.
Door-to-door sales for energy products including retailers accredited to Victoria’s Solar Homes scheme were banned back in 2021, across all Solar Victoria programs, including the rebates offered for rooftop PV, home battery storage and zero emissions vehicles.
Last year, the ban was extended to retailers pushing products under the Victorian Energy Upgrades scheme. At the time the ESC said its enforcement powers included civil litigation or criminal prosecution, as well as penalty notices.
The commission said this week that it was alerted to CovaU’s alleged conduct in February of last year, after a former customer reported being cold-called and offered discounts to return to CovaU as their energy provider.
CovaU was fined in relation to prohibited conduct affecting eight Victorian customers, the ESC says, and has since “ceased engaging in the alleged conduct, terminated its contract with its telemarketing firm” and taken steps to improve its compliance and self-reporting obligations.
“Predatory sales tactics can cause significant financial and emotional distress to Victorian consumers,” said ESC chair and commissioner Gerard Brody on Monday.
“They also reduce trust in the market by only providing better deals to those that leave, while loyal customers miss out.
“The $341,724 fine paid by CovaU reflects the seriousness with which the Essential Services Commission treats the obligations of energy retailers.
“Wrongdoing has consequences, and we make sure they are felt.”
Brody says the ESC expects energy retailers to have systems in place to ensure they are abiding by the law, especially where third parties are used to engage with customers.
“Keeping consumer protections front of mind is paramount – particularly given the current cost-of-living pressures faced by Victorians,” he said.
Sophie is editor of One Step Off The Grid and editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
