Electricity companies are sneakily luring customers in with discounted offers, and then switching them over to more expensive plans after the deal runs out, ripping off the average Australia household by up to $587 a year.
The Daily Telegraph reported today that after being rolled over to a higher priced contract in 2016, the average household paid at least $278 more in power after their discounted offer expired.
Figures reveal that 47 per cent of households and 54 per cent of small businesses who haven’t switched plans in the past five years paid hundreds more for power in 2016.
And now the Prime Minister wants answers from energy retailers, as he prepares to meet with the heads of of seven large energy retailers in Canberra on Wednesday.
They may have though they could get away with it, but the heads of retailers including Energy Australia, Origin Energy and AGL will be forced to explain the dodgy practice after Malcolm Turnbull said in a letter that the average family could save up to $830 a year by shopping around and switching from the “worst standing offer, to the best market offer”.
He said he was particularly concerned that consumers were being rolled over to higher-priced contracts without their knowledge, and said that the suppliers were not supplying enough information to households when making the switch.
“Australia is blessed with abundant energy so it is simply not good enough that some families and business cannot always afford to turn on their lights, heating and equipment,” Turnbull said.
“The situation must be addressed urgently and directly.”
This revelation comes on the back of the big three energy retailers dropping fixed rate plans right after an energy price hike, claiming that there was not enough demand for them.
Fixed-rate plans offer customers a set price for each billing period, regardless of how much energy they’ve used, but have been dropped by EnergyAustralia, AGL and Origin in the past few weeks.
St Vincent de Paul Society’s Gavin Dufty told Fairfax Media that the move showed energy prices are likely to keep heading up.
“It suggests to me they are more likely to go up than down. It indicates there is volatility in the market if a retailer can’t offer a fixed one or two year contract.”