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About this training document

This document is provided by EnergyAustralia for the purpose of training ACN IBOs who wish to refer potential customers to EnergyAustralia via ACN.

It includes content that explains and addresses regulatory requirements of the Australian Consumer Law and the Energy Retail Code. These requirements protect the rights of the Australian Consumer and this training provides a broad understanding of the regulatory / legal requirements involved in selling and supplying energy to consumers.

When representing EnergyAustralia’s ACN offers to your warm market, and when referring customers, you must take the right steps to ensure that you have met your regulatory obligations to the Australian consumer and that you have conducted your ACN IBO business in an ethical and credible manner.

This EnergyAustralia training document should be read carefully and reviewed by you in conjunction with ACN’s Policies and Procedures and the ACN Getting it Right Customer Acquisition Guide (available online via your IBO Back Office).

EnergyAustralia IBO Training Pack

Training Module 1 – Introducing EnergyAustralia

Updated: 29 November 2016

MK

T-32

06

Who is EnergyAustralia? An integrated energy business with an enterprise value of around $5 billion*

* As at 1 March 2011

Retail Assets

Customers 2.8 million customer accounts

Electricity Assets (MW)

Yallourn Coal-fired power station 1,480

Tallawarra Gas-fired power station (stage A) 435

Tallawarra Stage B (permitted) 500

Hallett Gas-fired power station 203

Marulan Gas-fired power station (permitted) 700

Delta Western Gentrader (Mt Piper & Wallerawang)

Offtake Coal-fired power stations 2,400

Newport & Jeeralang Offtake from gas-fired power stations 966

Wind farms - Waterloo - Cathedral Rocks

Management of wind assets 144

Petratherm 10% equity - Paralana geothermal project 30

Mallee Solar Park Proposal for solar power station 180

Gas Assets

Iona gas storage and processing plant

22 PJ gas storage facility

Eastern Star Gas 20% permits

Upstream gas Equity in Queensland CSM developments

IBO Training Module 1 – Introduction to EnergyAustralia

Company History

•  EnergyAustralia was a Government owned company.

•  TRUenergy acquired EnergyAustralia’s Retail customer base from the NSW State Government on 1 March 2011.

•  The NSW Government’s sale did not include EnergyAustralia’s network assets. The distribution network remained under government ownership and was renamed Ausgrid.

•  Before the acquisition, EnergyAustralia was the largest electricity retailer in NSW, servicing 1.5 million energy accounts concentrated in the Sydney metropolitan and Newcastle regions.

•  EnergyAustralia's retail customer base also includes residential, small and medium enterprise customers as well as commercial and industrial customers across regional NSW, Queensland, Victoria and the Australian Capital Territory.

•  In October 2012, TRUenergy merged the two retail businesses under the EnergyAustralia name and relaunched the brand.

IBO Training Module 1 – Introduction to EnergyAustralia

Training Module 2 – Product

Learning Objectives •  Understand the difference between a standard retail contract and market

retail contract

•  Understand a benefit term

•  Understand the difference between Government Regulated Tariffs and Market Based Tariffs

•  Explain Residential energy products

•  Explain Business energy products

•  Understand what is accredited renewable energy

•  Understand how each discount of EnergyAustralia’s products works

•  Understand the post sale process

•  Understand the cooling off process

•  Understand relevant industry terms

IBO Training Module 2 – Product

Government Regulated Tariff vs. Market Based Tariffs

Government Regulated Tariff (GRT) Market Based Tariff (MBT)

Important

•  YOU MAY NOT say that the discounts available via ACN are based on the Government Regulated Tariff.

•  YOU MAY say that the discounts available via ACN are based on EnergyAustralia's standard rates.

•  For many customers, the EnergyAustralia MBT is equivalent to the respective GRT in their location, however this does not apply in all cases.


GovernmentRegulatedTariff(GRT) MarketBasedTariff(MBT)

GovernmentRegulatedTariffsarebasicsupplyarrangements,andtheminimumstandardrequiredbytheenergycodeintherelevantstate

TheEnergyAustraliaoffers(anddiscounts)availablefromACNarebuiltonMarketBasedTariffs(MBTs)

AselectricityandgasareessenEalservices,aGRTallowscustomerstoconnectenergysupplywithoutenteringintoafixed-termcontract

MBTsaresetbyindividualretailersandNOTbythegovernment.Itiseasiesttothinkofthemastheretailer’sstandard(pre-discounted)rates

EachretailermustofferGRTpricing RetailerscanchangethepricingofMBTplanssolongasappropriatenoEceisgiventothecustomer

AcustomercannotsignupforaGRTplanviaACN EnergyAustraliaoffersavailableviaACNprovideadiscountforafixedbenefitterm

Standard Retail Contract and Market Retail Contract


StandardRetailContract MarketRetailContract

Basicsupplyarrangement Allotherplanse.g.“FlexiSaver–Home”&“EverydaySaver–Business”

Standingofferorgovernmentregulatedplans

Discountsavailableduringthesetbenefitterm

Noexitfees Exitfeesmayapply

Nodiscounts–thereforenobenefitterm TermsandcondiEonssetbyEnergyAustralia

TermsandcondiEonssetbyAustralianEnergyRegulator(AER)

PleaserefercustomersbacktoEnergyAustraliaifrequested

Tariff Refresh Schedule

From time to time, electricity and gas rates (tariffs) are updated.

•  Tariff refreshes affect all electricity and gas retailers. •  A tariff refresh does not affect discounts on energy products. •  Tariff refreshes are performed on an annual basis. •  Tariff refresh schedules will vary based on state.

Tariff refresh schedule by state and fuel type


NSW VIC QLD SA

Electricity 1stJuly 1stJanuary 1stJuly 1stJuly

Gas 1stJuly 1stJanuary N/A 1stJuly

What is a Benefit Term?

•  A Benefit Term is the period for which a benefit (e.g. Discount) is applied to a contract.

•  Benefit Terms only apply to Market Retail Contracts and can be 1, 2 or 3 years.

•  Exit fees may apply if a customer ends their contract within the Benefit Term.

•  The Benefit Term commences when supply commences, not the date of the quote.

•  20 to 40 days before the end date of the Benefit Term, EnergyAustralia will send a letter to the customer which outlines their options to continue supply.

•  Be careful not to confuse a Benefit Term with a Contract or Exit Fees. Below is an example of an offer with a 3 year benefit term.


Contract Term ongoing

Date EnergyAustralia wins the billing rights (this can take up to 3 months)

Benefit Term – The customer will receive the offered discount for this period.

Year 1 ends Year 2 ends Year 3 ends

Customer receives communication regarding options for new benefit term

Exit fee is chargeable if the customer leaves within this period.

End of Cooling Off Period Sign-up Date

Residential Offers Flexi Saver – Home

Availability Victoria, New South Wales, South Australia and Queensland

Pricing EnergyAustralia Market Based Tariff prior to discounts being applied

Discount Structure Discount off usage charges when the account is paid by the due date

Electricity & Gas Discounts For current discounts, check: www.acnpacific.com/energy

Electricity & Gas Tariffs For current tariffs, check: www.acnpacific.com/energy

Benefit Term 1 year

Fuels Electricity and Gas

Term & Exit Fees No exit fees are applicable


Energy offers change frequently. To access the current offers, visit: www.acnpacific.com/energy

Residential Offers – Storefront example



Residential Offers – New South Wales Distributors

What is a distributor? Energy Distributors are tasked with maintenance of the “poles and wires” component of the electricity network. Distributors operate within fixed geographical boundaries and a customer cannot switch between distributors in the same way they can with retailers.

Who are the distributors in NSW?

Ausgrid: Formerly EnergyAustralia (EA). Services metro areas of Sydney, Central Coast and Hunter regions. Endeavour Energy: Formerly Integral Energy (IE). Services regional areas of Sydney and Illawarra regions. Essential Energy: Formerly Country Energy (CE). Services the majority of rural and regional areas. Essential Energy services approximately 95% of NSW geographically.

Which distributor services my address?

If you are unsure which distributor services your premises you can check this information by referring to your most recent invoice or reviewing the distributor map included in this document (refer to next page). Distributors are the first point of contact when raising faults or reporting emergencies and are always listed on the front page of your bill.

Why is this information important?

EnergyAustralia offers for residential electricity in NSW are based on distributor. Accordingly, the offer available to you will vary based on which distributor services your address.


Residential Distributors – New South Wales


Residential Offers – Storefront example

•  EnergyAustralia’s EAzyQuote tool will automatically determine which distributor services your electricity meter.

•  The EAzyQuote tool will populate the relevant offers based on this information.

How the Pay-on-Time Discount works

•  This discount is applied to the customer’s total usage charges (GST inclusive), when the customer pays their bills by the due date.

•  PureEnergy (green energy) charges, solar feed-in credits and supply charges are not included in the discount calculation.

•  Provides an incentive to the customer to pay their account by the due date.

•  The invoice will display the Pay-on-Time discount in the Account Summary on the front page of the customer’s invoice.

•  If customer pays the discounted total after the due date, their next invoice will include a charge equivalent to the amount of the discount (for which the customer was not eligible).


Peak Usage 200.00 Off-Peak Usage 150.00 Shoulder Usage 50.00 Supply Charge 70.00 ------------------------------------------------------------------------------------ Current Charges ex. GST 470.00 GST 47.00 ------------------------------------------------------------------------------------ Total Amount Due inc. GST 517.00 27% discount on usage if paid by due date 118.80 cr ------------------------------------------------------------------------------------ Total Amount Due if paid by due date 398.20

Discounts are calculated based on the total usage charges. The pay on time discount is applied after GST is added.


Example of how Pay-on-Time discounts are applied on the bill

Pay on Time Discount Calculation Total Usage Charges inc. GST = $440 Discount = (27% x $440) = $118.80 Appears on Page 1 of customer’s bill

Total Usage Charges

$200 + $150 + $50 = $400 (excludes GST)

Including GST = $440 Appears on Page 3 of customer’s bill

GST is added to current charges

Recap of EnergyAustralia Residential Offer


Item DescripGon

FlexiSaverPlans Varyingdiscountsofferedineachstateinreturnforpromptpayment

BenefitTerm Discountappliesfor1yeara[erwhichanewoffermustbetaken

ExitFees Noexitfeesareapplicable

PaymentMethods MulEple,easy-to-accesspaymentmethods

Concessions Electricityconcessionrebatesavailableforeligiblecustomers

Distributor Electricityofferswillvarybasedonwhichdistributorservicesthepremises

Business Offers Everyday Saver – Business

Availability Victoria, New South Wales, South Australia and Queensland

Pricing EnergyAustralia Market Based Tariff prior to discounts being applied

Electricity Discounts For current discounts, refer to www.acnpacific.com/energy

Gas Discounts For current discounts, refer to www.acnpacific.com/energy

Benefit Term 2 years

Term & Exit Fees Exit fees may be payable if the customer leaves EnergyAustralia within 2 years of transfer date. Penalties are:


NSW VIC QLD SA

1styear $150 $22 $22 $150

2ndyear $100 $22 $22 $100

Business Offers – Storefront example



How the Guaranteed Discount works

•  Customer receives a percentage discount off their usage charges

•  Guaranteed discount will display as a line item on the Page 3 of the customer’s invoice, beneath their usage charges.

•  Guaranteed discount is calculated based on the total of usage charges before GST is added.

•  Discount is guaranteed for the Benefit Term

•  Note that PureEnergy (green energy) charges, solar feed-in credits and supply charges are not considered to be usage and are therefore not subject to discounting.


Peak Usage 200.00 Off-Peak Usage 150.00 Shoulder Usage 50.00 17% guaranteed discount on usage 68.00 cr Supply Charge 70.00 ------------------------------------------------------------------------------------ Current Charges ex. GST 402.00 GST 40.20 ------------------------------------------------------------------------------------ Total Amount Due inc. GST 442.20

Discounts are calculated based on the total usage charges. The guaranteed discount is applied before GST is added.


Example of how Guaranteed discounts are applied on the bill

Total Usage Charges

$200 + $150 + 50 = $400 (excludes GST)

Appears on Page 3 of customer’s bill

GST is added to current charges

Guaranteed Discount Calculation Total Usage Charges exc. GST = $400 Discount = (17% x $400) = $68 Appears on Page 3 of customer’s bill

Contract Flexibility

•  No exit fee if the customer transfers to other eligible EnergyAustralia products.

•  No exit fee if the customer moves premises and remains a EnergyAustralia customer.

•  If the customer takes a different product at their new premises, the terms and conditions of the new product will commence from their move-in date (including any applicable exit fees).


Concurrent Transfers

Important:

If the customer has requested another transfer with another retailer they MUST first contact the other retailer to cancel this transfer. If they don’t, EnergyAustralia’s transfer will be cancelled and the application will fail.


Sales Process & Timeline

IBO logs into EnergyAustralia online quoting

tool.

Customer receives online energy quote.

Customer accepts

EnergyAustralia offer online.

Application processed by

EnergyAustralia electronically.

Start of process

EnergyAustralia creates account in billing system.

24 hours


Change of Retailer Process

Confirmation pack mailed

Cooling Off

Period Transfer Process

Final bill from

previous retailer

Current Retailer

First EnergyAustralia

bill

Sale to Customer through online

quoting tool

Vendor

Day 1 Day 2 (within 48 hrs of sale)

10 business days

Up to 3 months or Next Scheduled Read date (NSR)

After NSR Up to 3 months after NSR

Legislation requires supply agreement to be sent to

customer within 48 hrs of sign-up


The Role of Concessions

•  Governments introduced concessions as a way to ensure that all households have access to electricity.

•  As an energy retailer, EnergyAustralia has an obligation to ensure that such concessions are applied against the electricity bills of eligible customers.

•  Because concessions are funded by state governments, they differ by state and the process by which they are applied varies accordingly.

•  As concessions schemes are run by the state government, eligible customers will receive the same concession entitlements from every energy retailer.


How to register for concessions


It is important to understand that an applicant cannot register concession details during the online application (in EAzyQuote).

QLD, NSW, ACT and VIC Customers from these states can register their concession details by following the instructions contained in their confirmation pack.

South Australia These applicants must register their concession details for EnergyAustralia by contacting the Department of Communities and Social Inclusion after they receive their first EnergyAustralia bill. Once this has been performed, their next EnergyAustralia bill will include back-dated concessions for the period of the first invoice. To register concession details for the first time, the customer must either use the online registration tool at sa.gov.au/concessions or complete a paper form.

To update concession details already registered (or for more info), call 1800 307 758.

Industry Terms The energy industry uses the following terminology on a regular basis:

Tariff A pricing structure for electricity or gas.

Service charge The fixed charge a customer must pay for each bill in order to have the service available at the property.

Peak usage Energy used during the times designated under the customer’s current arrangement (usually 7am to 11pm daily for electricity).

Off-Peak usage Energy used during the times designated as ‘Off Peak Usage Times’ under the customer’s current arrangement (usually 11pm to 7am for electricity though differs depending on your network tariff).

Retailer The company that purchases energy on behalf of the customer and provides them with billing and other customer services.

Network provider The company that transports the gas or electricity to the customer’s door through “cables and pipes” Also called ‘LNSP’ (i.e. Local Network Service Provider) or ‘Distributor’

NMI National Meter Identifier A unique number allocated to each electricity metering point. Not to be confused with the meter number

Kilowatt hour (kW h) Unit of measure. Used to register how much electricity has been consumed.

MIRN Meter Installation Registration Number. A unique number allocated to each gas metering point. Not to be confused with the meter number.

Mega joules (MJ) Unit of measure used to register gas usage


Industry Terms Continued…

Energisation The process of connecting the customer’s electricity supply. Otherwise known as a ‘fuse insert’ or ‘turn on’.

Change of Retailer Refers to the transfer of a customer from one retailer to another – also often referred to as a new account or a pure acquisition.

Product Switch A product switch is the upgrade of an existing EnergyAustralia customer to a new plan and contract. A product switch is commonly referred to as an upgrade.

Concurrent Transfer A situation where two different retailers submit a request to win the same account at the same time. In these cases both requests are cancelled.


Confirmation Pack

Following a successful application, EnergyAustralia will send a confirmation pack by post or e-mail within two business days.

The Confirmation Pack provides all terms, conditions etc, in writing and reiterates the information provided during the online sign-up process.

The confirmation pack will contain the following:

•  Welcome letter •  Energy plan details and written disclosure statement •  Instructions on how to register concessions •  Terms and conditions •  Direct debit form •  Cancellation notice


Cooling Off Period

All customers who purchase any EnergyAustralia product are entering a contract and entitled to a 10 business day cooling off period in case they change their mind.

Customers can cancel their agreement during the 10 business days of the day after they receive their confirmation pack. There are two ways to cool off:


Cooling-offmethod Detail

Byphone CallEnergyAustraliadirectlyon133466tocanceltheagreement

Bypost CompletethecancellaEonnoEcecontainedintheconfirmaEonpackandsendbypostorfaxtoEnergyAustraliatoprocessthecancellaEon

Account Payment Options

Payment options are displayed on each customer invoice.


PaymentOpGon Details

BPAY •  Cheque,SavingsorCreditCardaccountthroughparEcipaEngfinancialinsEtuEons

Cheque/CreditCard •  Paymentreceivedviapost,EnergyAustraliacallcentreorIVRphonepaymentsystem

•  VisaandMastercardaccepted•  AmericanExpressandDinersClubnotaccepted

AustraliaPost •  AustraliaPostoutletsorTelephoneService•  Cash(in-store),Cheque,SavingsorCreditCard

POSTbillpay •  AustraliaPostInternetPaymentServices•  Cheque,SavingsorCreditCardAccount

DirectDebit •  Cheque,SavingsorCreditCardAccountthroughparEcipaEngfinancialinsEtuEons

Training Module 3 – Legal, Regulatory & Compliance

Learning Objectives

•  Understand the importance of compliance

•  Clarify the legal and regulatory environment

•  Explain specific legal requirements

•  Describe Explicit Informed Consent (EIC)

•  Explain the basics of a contract

•  Understand appropriate behaviours and conduct

•  Identify the Privacy Act requirements

•  Understand quality assurance measures taken by EnergyAustralia

•  Recognise the importance of accurate record keeping

IBO Training Module 3 – Legal, Regulatory & Compliance

The Legal & Regulatory Environment


Your Legal & Regulatory Obligations


ConsumerProtecGonLegislaGon

TheCompeEEonandConsumerActorCCA(afederallaw)containsoverarchinglawswhichprotectcustomersbuyinggoodsandservicesfrombusinesses.TheselawsarecontainedinSchedule2oftheCCAandarereferredtoastheAustralianConsumerLaw(“ACL”).

EnergySpecificLegislaGon

TheNaEonalEnergyRetailLaw(NERL),NaEonalEnergyRetailRules(NERR)andRegulaEonsandtheEnergyMarkeEngRules(setoutintheNERR)regulatetheretailsupplyofenergytocustomers.

Anyrelevantstate-specificElectricityandGasActsandregulaEonsorcodeswillalsoapplytoEnergyAustralia’ssalesandmarkeEngacEviEes

EnergyAustraliaiscommiOedtoethicalandtruthfulsalespracGces

AsasalesagentofEnergyAustraliayoumustensurethatyoudonotmisleadcustomersandthattherepresentaEonsyoumakecomplywiththelegislaEveandregulatoryrequirements.

EnergyAustraliaprovidesthistrainingandalsoassessesyouonyourunderstandingoftheLegal/RegulatoryenvironmenttoensurebestpracEceandtosupportclean,compliantsellingpracEces.

Relevant Laws & Codes

Australian Consumer Law (ACL) – National

•  The ACL came into force on 1 January 2011 – it is a single, national consumer law giving consumers the same protections, and businesses the same obligations across Australia.

•  The ACL replaces previous Commonwealth, state and territory consumer protection legislation.

•  The ACL regulates the negotiation of unsolicited consumer contracts (i.e. door to door or outbound sales), including contact hours and disclosure requirements.

•  The ACL includes existing misleading and deceptive conduct and unconscionable conduct provisions and new unfair practices provisions.


Relevant Laws & Codes


NaGonalEnergyRetailLaw(NERL)

TheNERLisanaEonallawthatcommencedon1July2012

TheaimoftheNERListoestablishanaEonalenergyconsumerframeworkfortheregulaEonoftheretailsupplyofenergytocustomers

TheNERLalsoprovidesfortheNaEonalEnergyRetailRules(NERR)(includingtheEnergyMarkeEngRules)andRegulaEons

EachStateandTerritoryhastoseparatelyenacttheNERLandNERR.SomeStatesandTerritoriesareconsidering“carvingout”certainaspectsoftheNERLorNERR,orpreservingcurrentState-basedMarkeEngCodesinsomerespects.ThismakesitdifficultforEnergyAustraliatoknowwithcertaintytheprecisecoverageoftheNERLandNERRineachStateandTerritory

OurapproachinthistrainingistosetoutthenaEonalrequirementsoftheNERLandNERR,absentanypotenEalstatecarve-outs

WhatdotheNERLandNERRregulate?

TheNERLandtheNERRcoverdetailsincluding:

•  pre-contractualrequirementsofretailers

•  Cooling-offrequirements

•  EnergyMarkeEngRules

•  ComplaintsanddisputeresoluEoninformaEon

TherequirementsintheNERLandNERRoperateinconjuncEonwiththerequirementsoftheCCAandtheACL.AnacEvitythatisnotprohibitedundertheCCAorACLmaybeprohibitedundertheNERLorNERR.YoumustconsiderallrelevantlawswhenconducEngmarkeEngandsalesacEviEes.AnyuncertaintyshouldbereferredtotheACNComplianceManager,whomayseekadvicefromtheEnergyAustralialegalteam.


Explicit Informed Consent (EIC)

What is Explicit Informed Consent (EIC)?

EnergyAustralia has developed a Sales Verification Process that allows a customer’s Explicit Informed Consent (EIC) to be captured at point of sale.

Explicit informed consent aims to ensure the customer is fully aware of the key components of the contract and is required to complete all sales.


Explicit

Thecustomerhasexpressly,consciously‘optedin’leaving

nothingimplied.

Informed

ThecustomerknowsexactlytowhattheyareconsenEng.

When is EIC required?

•  Under the NERL and NERR, we are required to obtain the Customer’s explicit informed consent (EIC) to enter into a retail transfer or market retail contract with a Customer

•  EIC is also required for a number of other matters, including to change bill cycles, to bill smooth, to send notices electronically and to create a direct debit arrangement (this is done via the direct debit form)

•  A transaction is void if EIC is not obtained where it was required by the regulatory requirements

•  Records of EIC must be kept for at least 2 years


How do we capture Explicit Informed Consent (EIC) when acquiring customers through ACN?

For ACN online applications, EIC is captured in the following way:

•  A customer goes online and is provided an EnergyAustralia offer (quote).

•  The customer will click to apply for the offer and fill out the relevant sign-up details to be sent onto EnergyAustralia.

•  All the necessary information for the customer to make an informed decision online (complete pricing, terms, payment methods, access to all relevant industry information) will be disclosed on-screen to the applicant.

•  In order to complete the sign-up process, the applicant must confirm that they have understood all of the disclosed information (and therefore accept the offer).


Cooling Off Period

Inform the customer of the cooling off / termination period

•  During discussions with the customer you should advise them of their cooling off / termination rights. Customers have the right to terminate the agreement within 10 business days the day after they receive their confirmation pack.

•  The customer will be provided information which allows them to cancel the agreement within the 10 business days cooling off period.


The Basis of a Contract


Basics of a Contract

A contract is a legally binding or valid agreement between two parties.

A contract is formed when an offer by one party is accepted by the other party and consideration (in our case, in the form of money) is paid. NB: In our case, the payment of money by the customer is after receipt of their first bill.

The law will consider a contract to be valid if the agreement contains all of the following elements:

•  An intention between the parties to create binding relations; •  consideration (in our case, in the form of money) to be paid for the promise made; •  Legal capacity of the parties to act; •  Genuine consent of the parties; and •  legality of the agreement. An agreement that lacks one or more of the elements listed above is not a valid contract.


Basics of a Contract The key requirements for a legally binding contract to be created:

Offer, Acceptance , Intention , Length, Certainty

Offer

Intention It needs to be demonstrated that both parties INTENDED to create a legally binding relationship with each other – The customer asking for a quote, further information or wanting to ‘think about it’ does not demonstrate an ‘intention’ to enter a binding contract.

An offer is the first step in creating a contract – when a customer completes the online quoting process, EnergyAustralia is making an offer to them. The offer will give the customer a clear understanding of what EnergyAustralia will provide them.

There needs to be an ‘acceptance’ of the offer made to the customer. In the energy industry, the “quality” of the acceptance must be ‘explicit’ and ‘informed’.

Acceptance


Length

Intention

Certainty

The customer must be made fully aware of the length of the contract and any fees which might be incurred as a result of terminating the contract before the end of specified period. The online quoting process will disclose all of this information to the customer.

The terms of the contract must be certain and available to the customer. The online sign-up will disclose to the customer the major T&Cs, gain Explicit Informed Consent and advise of the right to cool off / cancel.

REMEMBER: The agreement by EnergyAustralia to sell energy to a customer is ALWAYS a contract between the parties regardless of whether there is a commitment to a term of the contract and whether exit fees apply.

MINORS: We cannot enter into agreements with a Minor. A Minor is defined as a person under the legal age of full

responsibility

Do not under any circumstances say that a product without a fixed term or an exit fee is not a contract.

Basics of a Contract The key requirements for a legally binding contract to be created:

Offer, Acceptance , Intention , Length, Certainty


Competition & Consumer Act and Australian Consumer Law



The objective of the Competition & Consumer Act (CCA) is to enhance the welfare of Australians by promoting competition and fair trading and providing for consumer protection. This summary of the CCA deals mainly with Schedule 2: Australian Consumer Law (ACL)

Complying with the CCA is necessary to avoid breaking the law and may actually improve performance by giving businesses a competitive edge. It can improve profitability through innovation and through the improved safety and quality of products and services, enhance business reputation and strengthen consumer trust through good corporate citizenship.

Who does the CCA affect? The CCA regulates relationships with customers, competitors, and suppliers. One aim of the CCA is to prevent anti-competitive conduct, thereby encouraging fair and ethical competition and efficiency in business. This gives consumers a wider choice of price, quality and service.

Which activities does the CCA regulate? The CCA applies to just about every aspect of a business - for example, advertising, price setting and transactions with other businesses or consumers.

Overview of the Competition & Consumer Act


Breaches and Penalties Breaches of the CCA are taken very seriously and may result in the following financial penalties.

Part IV - Anti-Competitive Practices Schedule 2 - Australian Consumer Law

•  Up to $10 million, three times the gain from the contravention, or if the gain cannot be determined, 10% of the annual turnover of the corporate group (whichever is greatest) for companies

•  Up to $500,000 for individuals

•  Up to $1.1 million for companies •  Up to $220,000 for individuals

A breach of criminal provisions may result in a conviction (criminal record) and criminal sanctions (including jail sentences of up to 10 years for cartel conduct).

Other penalties and remedies may include compensation to anyone who suffers loss or damage, injunctions, variations to contracts, orders to implement or amend compliance programs, corrective advertising and/or orders barring individuals from company management.

Also ‘hidden’ costs like disruption to business, loss of management and employee time, public disclosure of documents, legal costs, significant reputational harm and adverse publicity.


Who enforces the law?

The Australian Competition and Consumer Commission (ACCC) is responsible for enforcing the CCA (including the ACL). In addition to the ACCC, there are regulators that are responsible for administering and enforcing consumer protection laws in each of the States and Territories.

Third parties (including competitors and customers) can complain to the ACCC and ask them to investigate EnergyAustralia's conduct. The ACCC has been known to investigate on the basis of a single complaint. The ACCC has very wide powers of investigation and to seek penalties and other remedies where it considers that there has been a breach of the law.

Third parties can also bring actions directly if they think EnergyAustralia has (or will) breach the law and they may or do suffer loss or damage.


Additional Enforcement Powers: Australian Consumer Law (ACL)

Regulators also have a range of other enforcement powers to pursue possible breaches of consumer protection provisions in the ACL. These are listed below.

IssuesubstanEaEonnoEces IssuepublicwarningnoEces

IssueinfringementnoEces Seeknon-partyredress

Regulators can issue substantiation notices requesting information and documents capable of substantiating or supporting claims or representations relating to goods or services. Substantiation notices are intended to be a 'preliminary investigative' tool that may assist the regulator in determining whether to take action for a suspected breach of the law. The recipient has 21 days to comply. There is no threshold trigger for an exercise of this power and failure to properly comply with the notice has consequences (i.e. penalties and infringement notices).

Regulators can issue public warning (aka ‘name and shame’) notices to warn the public of a suspected breach of certain provisions of the ACL. The regulator must satisfy certain criteria before issuing a notice. Warnings are posted on the ACCC's website. Such notices have the potential to result in serious reputational harm to EnergyAustralia.

Regulators can issue infringement notices (akin to a parking ticket) where it has reasonable grounds to believe that there has been a breach of certain provisions of the ACL. Payment of the penalty amount in the notice avoids court action and is not meant to be taken as an admission of liability.

Regulators can seek non-party redress for consumer law breaches, on behalf of consumers without those consumers needing to be part of court proceedings.


Australian Consumer Law - Overview The Australian Consumer Law (ACL) is a single, national consumer law giving consumers the same protections, and businesses the same obligations and responsibilities, across Australia. The ACL replaces previous Commonwealth, state and territory consumer protection legislation. The ACL includes:

•  Misleading and deceptive conduct and unconscionable conduct provisions

•  Unfair practices provisions, including provisions relating to false and misleading representations, single prices (component pricing) and harassment and coercion

•  An unfair contract terms regime covering standard form contracts

•  Laws providing certain guarantees to consumers when buying goods and services

•  A national product safety law and enforcement system

•  Laws governing unsolicited consumer agreements, which applies to door-to-door sales and telemarketing

•  Penalties, enforcement powers and consumer redress.


Unconscionable Conduct There are two ways in which you can act unconscionably.

One is where a consumer is under some kind of special disadvantage or disability (e.g. they are illiterate or lack education, in poverty, infirm, drunk, lack mental capacity, are non-English speaking, elderly, etc.) and that is evident or you know of and you take advantage of that disadvantage/disability. Just saying that you didn't know of the disability is not a defence. Types of questions to ask yourself are whether the consumer could understand the message or the agreement you are offering them, or whether the consumer can understand English. We need to behave in a way that is fair.

Example A telemarketer for an energy company called up a household offering to supply retail energy plans. The telemarketer had a conversation with a male member of the household in which it was readily apparent that the man was unable to understand the offer being presented to him. The telemarketer concluded that the man was under the influence of alcohol, or was suffering from some other impediment that made him unable to understand the transaction he was entering into. Nevertheless, the telemarketer proceeded to sign the man up to a new energy plan. The unconscionable conduct here arises from the telemarketer taking advantage of a vulnerable consumer with a clear inability to understand the transaction.


Statutory Unconscionable Conduct The other situation is known as ‘statutory unconscionable conduct’ where in all of the circumstances, conduct should not be done in good conscience. Unconscionable conduct is more than mere unfairness - it must have an element of bad conscience. For business, behaviour can be unconscionable if it is particularly harsh or oppressive, and is beyond hard commercial bargaining.

Example Between 2009 and 2011 Lux Distributors, a company selling vacuum cleaners, organised visits to five customer homes on the basis that they would conduct ‘free maintenance checks’ of their existing vacuum cleaners. Lux then went to each home and purported to undertake this check when they were not qualified to do so, in circumstances where the check was designed to always result in the Lux vacuum cleaner outperforming the customer’s cleaner. The Lux representative then stayed in the home for 1.5 - 2 hours and subjected the customer to a range of selling techniques geared towards obtaining a sale of a Lux vacuum cleaner. The Full Federal Court found that this conduct was unconscionable under the ACL because in these circumstances the ‘norms of society’ required ‘honest and fair dealings’ and Lux failed to meet this standard. Lux representatives had been deceptive from the start by concealing the true purpose of the visit and that had tainted all the conduct thereafter. The length of time the sales representative spent in the homes of the women, and the solicitous selling techniques employed, created subtle pressure on the women to the point where the women felt pressured and obligated to buy. Even though there was a cooling off period, this was not relevant to make good the conduct that was otherwise unconscionable.


What Constitutes Unconscionable Conduct?

What constitutes unconscionable conduct will depend on various factors including:

•  The relative bargaining strengths of the parties

•  The consumer's ability to understand the documentation

•  Whether undue influence or pressure or unfair tactics were used

•  Whether the conditions imposed went beyond what was needed for the supplier's legitimate interests

•  The amount the consumer would have to pay for equivalent goods or services elsewhere.

The prohibition on unconscionable conduct also applies to commercial transactions and business dealings, unless the counterparty is a listed public company.


Misleading or Deceptive Conduct?

Section 18 of the CCA is a very broad provision establishing a norm of conduct. It prohibits conduct which is misleading or deceptive, or which is likely to mislead or deceive (it is not necessary to actually mislead). Whether or not conduct is held to be misleading or deceptive will depend on the particular circumstances of each case.

You cannot behave in a way that is likely to make a customer or supplier believe something that is not correct, or creates a false impression or leads to a wrong conclusion. Intent is not relevant - conduct can still be misleading even though a statement was made honestly and without any intention to mislead or deceive.

Statements which are factually incorrect will breach section 18. But you also need to avoid statements and/or conduct which create a misleading impression.


Misleading or Deceptive Conduct – Example 1

TPG advertised on television, radio and in print an Unlimited ADSL2+ plan for $29.99 per month. In smaller print (and in the case of radio, a rapid fire voiceover), TPG clarified that in order to take up this offer, consumers were also required to purchase a broadband internet service for an additional $30 per month, and to pay a setup fee.

The ACCC took court action and after a series of appeals, the High Court found that the ads were misleading because the dominant impression created was that ADSL2+ could be acquired for only $29.99 per month. In fact, the advertised service could only be acquired for $59.99 a month – A bundled, and more expensive, offer.

The High Court considered that most consumers would only absorb the ‘general thrust’ of the advertisement – The qualifier was not sufficient to overcome this overall impression or general thrust. TPG was ordered to pay $2 million in pecuniary penalties.



In September 2013, Red Energy paid four infringement notices totalling $26,400 and gave an undertaking to the ACCC in relation to misrepresentations allegedly made by a Red Energy telemarketer. The ACCC alleged that the telemarketer represented that:

•  He was calling about the consumer’s current energy bill with another provider

•  He was affiliated with the consumer’s current energy provider



In April 2014, EnergyAustralia was ordered by consent to pay $1.2 million in penalties in relation to certain unlawful door-to-door selling practices. The Federal Court declared that EnergyAustralia had, by conduct of its sales representatives, made false and misleading representations that:

•  The sales representative, and EnergyAustralia’s rate, was approved by, sponsored or affiliated with the government

•  The sale representative was attending the premises for the purpose of ensuring energy companies were charging the correct rate or tariff

•  There was a mandated rate that consumers should be charged and that the consumer’s current retailer was charging a higher rate, and

•  The consumer would become eligible for additional government entitlements that would reduce their bill if they switched to EnergyAustralia.


Unfair Practices The CCA also prohibits making certain false or misleading representations which are also a criminal offence. These include misrepresentations relating to: •  The standard, quality, value, grade, composition, style, model or history of goods or services

•  Whether the goods are new

•  The agreement of a particular person to acquire the goods or services

•  Testimonials (and also prohibits false or misleading representations that purport to be testimonials)

•  The sponsorship, approval, affiliation, performance characteristics, accessories, uses or benefits of goods or services

•  The price of goods or services

•  The availability of facilities for repair of goods or of spare parts

•  The place of origin of goods

•  A buyer’s needs for goods or services

•  Any conditions, warranty, guarantee, right or remedy

•  A requirement to pay for a contractual right that a person already has at law (e.g. consumer guarantees)


Unfair Practices – Examples Example 1: Standards or quality may relate to claims about gas pressure or electricity reliability. For example, claims that our electricity is somehow better or more reliable than a competitor's at the same supply address is likely to be a false representation.

An electricity supplier must not claim for example, that their green energy product comes from wind power, when it does not. Similarly any claims about reductions in greenhouse gas must be true and able to be substantiated.

To make a statement that a contract does not have conditions or fees like exit fees, when it does, will also be a false representation as to conditions. Example 2: Energy Watch provided brokering services in the retail energy market through a comparison website. The website featured statements such as ‘compare and save!’ and ‘we compare energy providers, rates and plans to find you a better deal’. A small disclaimer at the bottom of the page stated that Energy Watch only compared rates of its preferred suppliers.

The Court found that Energy Watch had represented that it compared all or many energy retailers in the customer’s area when in fact, Energy Watch only compared the rates of five energy retailers, and that this was a false representation about the uses or benefits of the services that they did not actually have, in breach of section 29(1)(g) of the ACL.

Energy Watch was also found to have made false representations about the savings that consumers could make.


Unfair Practices – Prohibited Conduct Unfair practices include many different forms of conduct - all of which are prohibited. These are listed in this slide and the next.

Misleading conduct in relation to employment

Single Price Disclosure

The CCA prohibits a person from engaging in conduct that is liable to mislead as to the nature, manufacturing process, characteristics, suitability for that purpose or quantity of any goods. An example of this may be advertising that supply of our electricity is more reliable than a competitor..

The CCA prohibits a person from engaging in conduct likely to mislead people seeking employment about the availability, nature, terms or conditions, or any other matter relating to the employment.

You must never represent or advertise any amount that constitutes only a part of the price of a product or service unless you also feature the full price of the product or service as a single figure and in a prominent way - You must always tell the whole story. Delivery fees do not need to be included in the single price (but need to be disclosed separately). The requirement to specify a single price does not apply where the representation is made exclusively to a body corporate. The requirement of prominence is for the single price to be at least as prominent as the most prominent part price representations. However, there is an exception to this level of prominence where services to be supplied under a fixed term contract provide for periodic payments and also provide for the supply of goods. In this case, the single price need simply stand out so that it is noticeable and easily seen.

Other Misleading Representations


Unfair Practices – Prohibited Conduct (continued)

Falsely Offering Prizes

Harassment or Coercion

The CCA prohibits persons from offering rebates, gifts, prizes, or other free items in connection with the supply of goods or services if they are not intended to be provided as offered or if they do not supply them within a reasonable time (if no time is set).

The CCA prohibits the use of physical force, undue harassment or coercion in relation to the supply of goods or services to a consumer, or payment for goods or services by a consumer.

Bait Advertising

The CCA prohibits a person from advertising goods or services at specified prices where there are reasonable grounds for believing that the person will not be able to supply the goods or services at those prices for a reasonable period and in reasonable quantities.

The CCA provides that where two prices are displayed in relation to a good or service, charging a customer the higher of the displayed amounts is prohibited.

Unsolicited Goods or Services

The CCA prohibits a person from asserting a right to payment for goods or services where they have been supplied to a customer without the customer requesting them, unless the person reasonably believes there is a right to payment.

Multiple Pricing


Unfair Contract Terms A term in a standard form consumer contract that is 'unfair' is void. The term will be treated as if it never existed and cannot be relied on, but the contract can continue to bind the parties if it is capable of operating without the unfair term.

A term will be unfair if it satisfies all of the following elements:

•  It causes a significant imbalance in the parties' rights and obligations arising under the contract

•  It is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term

•  It would cause detriment (financial or otherwise) to the consumer if applied or relied upon.

Only a court can determine a term as unfair, and make orders including declaring that all or part of a contract is void, varying a contract as the court sees fit, directing a party to refund money, return property or repair any products provided.

A consumer contract is a contract for the supply of goods or services to an individual who is actually acquiring them (wholly or predominately) for personal, domestic or household use or consumption.


Unfair Contract Terms - Example Examples of unfair terms are listed in the CCA and are intended to provide guidance only - each situation needs to be considered in its particular circumstances.

The list includes common commercial terms, such as terms that permit or have the effect of permitting one party but not the other to:

•  Terminate the contract

•  Unilaterally vary the terms of the contract

•  Unilaterally determine if the contract has been breached or interpret the contract

•  Unilaterally vary the terms or the characteristics of the goods/services supplied

•  Renew or not renew the contract

There are a number of exceptions to the unfair terms regime. For example, it will not apply to terms that define the main subject matter of the contract, terms that are required or expressly permitted by law, or terms that set the upfront price payable under the contract.

Example ByteCard provided Internet connectivity, domain registration, hosting and web design services. Bytecard’s standard form contract with all customers contained terms that enabled it to unilaterally change the price of the contract without giving the customer the right to terminate; required the customer to indemnify ByteCard in any circumstance (even where the contract had not been breached or where the loss was caused by ByteCard’s breach of the contract); and allowed ByteCard to terminate the contract at any time without reason. The Federal Court found by consent that these terms were unfair and they were declared void. ByteCard was ordered to contribute to the ACCC’s costs.


Unsolicited Consumer Agreements: Door-to-Door and Telemarketing

The CCA also regulates the content and form of any unsolicited agreements reached with consumers (through either telemarketing or door to door sales), such as:

•  Requirement to give document to customer – The agreement document must be given to the consumer 5 business days after entering the agreement (if the agreement was made over the phone) or immediately after signing (in a door to door sale context)

•  Requirements for a valid agreement – The agreement document must be printed clearly/typewritten and transparent and contain the full terms of the agreement, the total price payable or how this will be calculated, any postal or delivery charges and the supplier's details. The front page must also inform customers of their cooling off rights, and be accompanied by a notice that the consumer can use to terminate the contract.

Additional requirements apply to agreements made by door to door sales, including that the agreement must be signed by the consumer and, if the agreement is signed by a person on EnergyAustralia's behalf, it must state that person’s details.


Unsolicited Consumer Agreements - Examples Example 1 In April 2014, the Federal Court ordered that Startel Communication Co pay penalties of $320,000 for misleading consumers about their rights under the ACL, when cold calling customers to sell mobile phone plans. Startel did not tell customers that they could cancel the contract within ten business days, did not supply customers with documents to help them decide whether they wanted to proceed with the contract and took money out of customers’ bank accounts during the cooling off period.

Example 2 In April 2014 EnergyAustralia was ordered by consent to pay $1.2 million in penalties in relation to unlawful door-to-door practices. In addition to making false and misleading representations, the Federal Court declared that EnergyAustralia had failed to:

•  clearly advise consumers of the purpose of the sales person’s visit (which was to sell EnergyAustralia products)

•  advise the consumers the sales person was obliged to leave the premises immediately on request provide information relating to their identity.

If we create an overall misleading impression about price, value or quality of our products or services we are likely to be breaking the law. Our intent is irrelevant.


Accessorial Liability A person can also contravene certain provisions of the CCA and ACL by being ‘involved’ in a contravention, including by: •  Aiding, abetting, counselling or procuring a contravention •  Inducing the contravention •  Being knowingly concerned in, or a party to, a contravention, or •  Conspiring with others to effect the contravention. Example Artorios Ink was a telemarketing company that sold ink cartridges to small businesses across Australia and was run by two brothers. In December 2013, the Federal Court found that Artorios engaged in misleading and deceptive conduct and made a number of false representations during telemarketing calls to the effect that the targeted small businesses had already placed orders for ink cartridges which simply required confirmation and/or Artorios was their business’ existing cartridge supplier.

The brothers admitted that they were knowingly concerned in those breaches. They worked in close proximity to the telemarketing staff and were aware of, and actively directed them to, engage in the conduct. The Court ordered the brothers to pay a $50,000 penalty each and give an undertaking that they would not manage or be a director of a corporation for five years. The Court said that the premeditated nature of the conduct and the targeting of low-level employees warranted the five year undertaking, even though none of the businesses suffered any substantial loss.

Handling Complaints

•  Customers have the right to complain to EnergyAustralia about any energy marketing activity conducted on its behalf.

•  If a Customer’s complaint is not resolved by EnergyAustralia, the Customer has the right to complain to the relevant State Energy Ombudsman or in the case of ACT to the ACT Essential Services Consumer Council.


Privacy Act, Quality Assessments & Record Keeping


The Privacy Act

Under Privacy law, EnergyAustralia must:

•  Only collect personal information that is needed for conducting its business

•  Tell the customer exactly how it will use their personal information and to whom the information will be disclosed (i.e. any third parties outside of EnergyAustralia)

•  Keep this information secure and not disclose it to anyone else Note: All information required to sign up a customer will be collected by the EnergyAustralia

website. You are not required to (and should not) collect or store any customer data.


What is Quality Assurance?

•  EnergyAustralia conducts post-sale assessments of sales made through all internal and external sales channels.

•  EnergyAustralia must be confident that the knowledge, behaviours, techniques and practices of our sales channels are legally compliant and beyond reproach.

•  The QA process is used to determine that customers understood that they entered into a contract and provided their explicit informed consent.

•  It is also designed to identify any process, system, product or behavioural problems that may have occurred during the sales process.

•  QA conducted by EnergyAustralia represents best practice and provides customers with confidence about EnergyAustralia’s approach to quality.

•  Customers are advised at the point of signing up online and through the terms and conditions provided, that they may be contacted in the future for audit purposes.


•  QA is conducted within EnergyAustralia by a non-sales related team.

•  Individual sales people are not permitted to audit their own sales.

•  QA occurs within 14 days from the date of sale.

•  The customer is asked a series of questions about their understanding of the sale encounter and the sales person who visited, called them or their online experience.

•  If the customer did not understand that they were entering in to a contract or did not provide their explicit informed consent to transfer to EnergyAustralia, or if they choose to, they can request to terminate the contract with EnergyAustralia during the audit.

•  If the customer cancels, we ask in-depth questions and seek information that allows us to identify why this occurred.

•  EnergyAustralia will then QA the activities of the sales people who marketed the terminated contract.

•  Feedback is provided to the relevant sales channel with recommendations to ensure that the problems identified are not repeated.


Quality Assurance – How it works

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