Telstra Energy – application for electricity and gas retail licence raises questions

This submission is made jointly to the Essential Services Commission from the Consumer Action Law Centre, Financial Counselling Australia, Financial Counselling Victoria and the Victorian Aboriginal Legal Service.

Together, we welcome the opportunity to comment on the application by Telstra Energy (a subsidiary of Telstra Corporation) for licences to sell electricity and gas in Victoria.

Overall, while we do not oppose Telstra Energy being granted a licence, the continued existence of serious systemic issues in the telecommunications industry raises very real concerns about whether these poor practices will be carried over into the way the business operates in the energy sector. These issues include mis-selling of products and services, a lack of effective dispute resolution processes, inadequate hardship support and inadequate processes to identify and take extra care with people who are vulnerable.

The systemic issues identified in the telecommunications industry arise partly because of the underlying inadequate regulatory framework and a resulting lack of enforcement action, but importantly, they also reflect a broader cultural problem. This is an industry that talks about being “customer focused” but like the banks a few years ago, the reality is that cost-cutting and/or sales at any cost are paramount.

If the poor culture at the heart of the telecommunications industry is allowed to seep into a telco energy offshoot, we will see the same systemic issues arise. This will be a very poor outcome for the community.

As part of our submission, we make the following recommendations:

  • Ensure Telstra Energy trains frontline staff on the requirements around selling, provision of information, and customer entitlements under the Payment Difficulty Framework, including the process for disconnection, has strict compliance protocols and undertakes its own internal audits of compliance.
  • Require Telstra and all telcos entering the energy sector in Victoria to provide regular data on their compliance with the Payment Difficulty Framework and data on any disconnections.
  • Investigate the broader consumer issues that arise with the bundling of energy and telecommunications services and ensure consumer protections (including the Energy Retail Code) address risks of consumer detriment.
  • Require Telstra Energy to outline commitments it will enact to ensure First Nations customers are not impacted by energy hardship and wrongful disconnection.

Read our full submission (PDF).

210701 SUB – Telstra energy license
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