Victoria’s Essential Services Commission has fined an energy retailer for wrongfully cutting off dozens of customers and planning to disconnect another 1,500 in the Australian state.
The commission found that 143 customers from Sumo Power and Sumo Gas had their services wrongfully cut off in December 2020.
It said that in one particular case, the energy retailer disconnected a customer who was actively involved in a payment plan without warning.
The commission also mentioned that another 142 customers were subject to service cut-off before the required six-day warning period had lapsed.
“This case illustrates the seriousness of a retailer taking shortcuts and not providing assistance to customers when providing an essential service,” Commission Chair Kate Symons said.
“Electricity and gas are essential services and customers should only ever be disconnected by an energy retailer as a last resort and by following the correct procedure.”
Symons said the commission discovered through investigation that Sumo had set up a target to cut off 1,500 plus customers before Christmas 2020.
“It arranged the timing of the billing process, so as to meet minimum regulatory requirements, and it short cut the time required to allow customers to reach out for help prior to disconnection,” she said.
“Some customers, who then sought to be reconnected to the energy supply, waited for long periods of time on the phone to speak to a Sumo representative.”
Furthermore, she alleged that Sumo stuck the names of customers it sought to cut off into a wall that staff labelled as the wall of shame.
She said the company also established a separate telephone call queue, and required employees to put customers calling about service cut-off into that queue.
“Call wait times in the separate call queue were long, an average of 45 minutes, with some customers eventually hanging up before they could speak to Sumo,” Symons said.
“Customers being disconnected from an essential service in this way is completely unacceptable.”
Sumo received 100 penalty notices from the commission in November 2021, and has since paid $500,000 in fines.
The commission has informed that from March, energy retailers will have to pay $36,348 (US$25,912) for a penalty notice instead of the current $5,000 (US$3,564) rate.
In addition, new civil or criminal mitigation liabilities will become effective. Specifically, retailers liabilities will be capped at $218,000 (US$155,000) per contravention, while criminal fines will be capped at $1,090,000 (US$777,000) or ten years in prison per offence.
Sumo did not immediately respond to a request for comment.