Customers impacted by incorrect refunds from energy retailers

In an environment where many customers are experiencing financial strain due to the impact of COVID-19, refund errors made by energy retailers cause increased distress.

These errors include customers that were incorrectly informed an account was in credit, only to realise that they in fact owed money to the retailer. When an account is rebilled, it may appear initially to be in credit, but once the account the rebilling is complete, customers often owe money to the retailer. This can be made worse when a retailer informs a customer that they were overcharged and entitled to a refund, or in some cases the retailer processes a refund for a customer, but after the account is rebilled, the customer is left with an outstanding account to pay. 

Errors may also arise where a customer requests a payment plan but a direct debit is processed for the full amount, leaving the customer short of funds for other essential payments such as rent. Delays in processing the refund can make the situation even worse for the customer. 

Case studies

Customer incorrectly advised of $3,512 account credit

A customer advised that he received an email from his energy retailer on 17 June 2020 regarding an overcharge for the period 14 September 2018 to 13 June 2019. He was advised $3,512 was owed to him on a closed account and told to contact the retailer for a refund. He did this, however the retailer could not locate the email, so the customer had to resend it. On 18 June 2020, the retailer advised it would investigate the issue and contact him. He contacted the retailer again on 24 June 2020 as he had not received a reply and the retailer’s representative advised it did not have the authority to approve the refund and did not offer another solution. 

The customer felt frustrated and complained to EWON. The retailer told us that the first email regarding the credit of $3,512 had been issued in error. It further advised that the customer owed $416 following the rebilling of the account. The retailer offered to waive this amount, however the customer didn’t think this was correct as he had originally been told that he had been overcharged. 
When we asked about details of the rebilling and outstanding balance, the retailer advised that three bills had been cancelled and re-issued after receiving new consumption data for the period of 13 June 2019 to 14 March 2020. Further, a credit had been applied to the customer’s account due to incorrect time-of-use billing during daylight savings, which left the customer owing $416. However, due to the poor customer service, the retailer offered to waive the balance, which the customer reluctantly accepted. He still felt the retailer should honour its original offer of a $3,512 refund, but we had no basis to take that part of the complaint further.

Direct debit error leaves customer with no money for rent

A customer advised her energy retailer that she needed to disconnect the electricity at her property and close her account as she was moving. As she had limited income, she arranged a payment plan for the outstanding bill. When the customer went to pay her rent, she realised the retailer had withdrawn the full amount owing of $330 from her bank account leaving her without any funds. When she contacted her retailer, she was told that she would be refunded and could then make her payment in installments, as previously agreed.  She spoke with three different customer service representatives over three weeks regarding the refund. During this time, the retailer took another $99 from her account for the disconnection when she left her property. The customer did not receive a notification or a bill for this fee so she approached EWON.

After we spoke with the energy retailer, it apologised for the delay and provided a refund for $238, which represented the amount that it had debited in error. The retailer also provided a customer service gesture of $198. The retailer advised the customer to make contact if she required a payment plan for the outstanding balance.