ACCC Warns of ‘Disproportionate Penalties’ for Energy Loyalty
The ACCC highlights that loyal energy customers may be overpaying due to outdated plans
Energy, ACCC, Australia, NSW, Victoria, South Australia, Queensland
Melbourne: So, it turns out that retail energy customers are actually paying less in 2024 compared to last year. But here’s the kicker: the ACCC is saying that if you don’t switch your plans regularly, you might be getting hit with extra charges just for being loyal.
People in places like NSW, Victoria, South Australia, and southeast Queensland who are still on older plans could be shelling out hundreds more each year than those who jump on new deals.
The ACCC’s latest report shows that customers on flat rate plans that are two years old or more are paying about 16.9% more, which is around $317 extra annually, compared to those on newer offers.
They’ve noticed that the longer you wait to switch, the bigger the “loyalty penalty” becomes. It’s like being punished for sticking around!
The report mentions that while it’s good to have some perks for newer offers, some folks are really getting the short end of the stick for not switching regularly.
Interestingly, the ACCC’s price calculations don’t even factor in government energy rebates, which could have made a difference in what people actually pay.
Even though there have been pushes to get customers to shop around more, over a third are still stuck on plans that are two years or older. That’s a lot of people missing out!
They also pointed out that the messaging around “best offer” can be confusing, with some retailers using the same terms for both new and old offers, which doesn’t help anyone.
On a brighter note, there’s been a bit of a shopping spree between August 2023 and August 2024, thanks to rising living costs and other factors. This has helped bring down average prices across the energy market.
Retailers are also feeling the impact of changes in default offer prices set by regulators, which have mostly been lower than last year in many markets.
Overall, the ACCC found that residential customers on flat rate plans saw about a 4% drop in energy prices. But it’s worth noting that this decline isn’t enough to completely offset the price hikes from 2022 to 2023.
So, even with the drop, prices in 2024 are still higher than they were before the energy market got all crazy back in mid-2022.
And don’t forget, the ACCC’s price assessments don’t include those government rebates, which could have helped lower actual bills for many customers.
Treasurer Jim Chalmers mentioned that energy prices are going down for a bunch of reasons, like reforms, more people looking for better deals, and stronger competition among retailers.