News

Consumer groups* have written to the Essential Services Commission (ESC) calling for Sumo Power’s (Sumo) licence to operate in Victoria to be investigated and monetary compensation for those wrongfully disconnected by the company.

The call comes after the ESC announced on 7 February 2022 that Sumo had paid a penalty** of $500,000 after the alleged wrongful disconnection of 143 Victorian customers in the run up to Christmas 2020.

“The ESC’s investigation revealed an appalling internal culture at Sumo,” said Patrick Sloyan, Senior Policy Officer, Consumer Action.

“We have written to the ESC to go further and investigate whether Sumo are fit to hold energy licences in Victoria. Sumo should also be made to compensate those individuals and families who were caused pain and distress when their power was unfairly cut off,” he said.

The wrongful disconnections occurred as part of Sumo management’s push to disconnect the energy supply of more than 1500 customers in November-December 2020, in the middle of the COVID-19 pandemic.  As part of this, it was revealed that:

• Sumo staff allegedly taped the names of 1500 customers who had failed to pay bills to a “wall of shame” with the aim of cutting their power;
• the company altered people’s billing schedules to fast-track disconnections
• Sumo created a separate telephone queue where customers calling about actual or pending disconnections were transferred to a line with wait times of up to 45 minutes.

“The egregious conduct uncovered by the ESC indicates that Sumo, its board and executive may not meet the ‘fit and proper person’ requirements to sell and supply energy in Victoria.

“Energy is essential to heating, food preparation and storage, washing ourselves and our kids, charging devices to stay connected, to work or attend school remotely and to attend telehealth appointments.

“Sumo’s actions have shown that it does not understand the essential nature of energy and it failed to recognise that its conduct had the potential to put people’s lives in danger especially during the pandemic,” he said.

ENDS

*Consumer Action, VCOSS, VINNIES, CISVic , FCVic, Brotherhood of St Laurence

**The ESC’s penalty notices relate to wrongful disconnections. However, it is unclear whether individuals affected by wrongful disconnections have received compensation. Section 40B of the Electricity Industry Act 2001 (Vic) and section 48A of the Gas Industry Act 2000 (Vic) provide for wrongful disconnection compensation of up to $3,500. This is an important mechanism to compensate retail customers for the harm arising from disconnection which is unfair because the retailer has breached its obligations.

MEDIA CONTACT

Mark Pearce- Consumer Action Law Centre
0413 299 567 mark@consumeraction.org.au