Consumer issues

Consumer warning: energy-saving device telemarketing scam

In September 2011, EWON and the Minister for Fair Trading issued an urgent warning to all consumers about a hoax product, called an ‘electricity-saving box’, being sold by fraudulent telemarketers claiming to represent the government.

The telemarketers claim that the electricity saving box, which is priced at around $200, will save 30-40% of a household’s electricity and reduce energy bills. They also falsely  claim that they are from the Australian Electricity Commission or Australian Energy Marketing Commission and that consumers will recover the full cost of the device via a government rebate 90 days after purchase.

The product (pictured above) does not work, as testing by CHOICE  has demonstrated. The telemarketers have no affiliation with any government body and there is no rebate available for this device.

Since issuing the release, EWON has received reports of new twists on the scam and increasingly intimidating tactics being used by the marketers, who have targeted the Farsi-speaking community in particular.

They’ve claimed that the government requires people to obtain the device. They’ve also made threats that the government will come to their home to check they’ve installed it and will fine them if they find they haven’t.

“This is clearly an opportunistic scam that’s designed to exploit people’s concerns about rising energy bills,” said Clare Petre, Energy & Water Ombudsman NSW. “We advise anyone who receives a phone call from these fraudulent operators to contact EWON or NSW Fair Trading immediately.”

Got an itch to switch? Get independent energy pricing comparison

Rising energy prices have prompted many consumers to shop around for a more competitive offer and a number of commercial energy price comparator websites are competing to attract them. EWON is concerned that these websites may not have information on all offers available  to consumers and that in some cases they may act more as a broker for particular companies.

EWON has received a number of complaints from people who have experienced problems with commercial switching sites and we strongly recommend that consumers access the free, independent energy pricing comparison information provided by IPART through the My Energy Offers website.

However, if you are looking at referring to a commercial switch site, be aware of these common problems customers have reported to EWON:

  • "Switching has cost me more money"
    Sometimes the savings customers stand to make may be offset by the cost of breaking a contract with their existing provider. It pays to check out all the costs involved in switching, as well as expected savings.
  • "I only enquired about  prices, but then I discovered they’d signed me up"
    Some people report making contact with these businesses simply to enquire about prices, but then later find out that they’ve been signed up and their account has been transferred without their consent. Take care to understand what you are agreeing to and in giving your personal details.
  • "The customer service is poor"
    The switching companies are not the energy retailer to which customers sign up. This often creates confusion around customer service expectations. For example, when customers who decide not to go ahead with a transfer advise the switching site, this notice may not get passed onto the retailer within the cooling off period. Similarly, when customers encounter  problems with their service and contact the switching site, they may not receive any actual assistance and be left waiting unncessarily. If you agree to transfer to another retailer, be sure to contact the retailer directly from then on.

Find out more about switching retailers