The ACCC has released a final determination authorising Energy Assured Limited and its members (energy retailers and energy marketers) to adopt an industry scheme for the self-regulation of door-to-door energy sales (the Scheme).
 
Provided the Australian Competition Tribunal receives no application for review of the determination, the authorisation will have effect from 15 July 2011 until 14 July 2014.

Draft determination

The ACCC previously issued a draft determination proposing to deny authorisation to the Scheme. In short, the ACCC's draft determination was based on the following considerations:
  • 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

In response to the draft determination, Energy Assured Limited conducted a review of its Scheme and made a number of amendments.

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
  • 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.

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