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I have been scammed... beware!

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#1 smtm

Posted 19 January 2009 - 04:58 PM

Beware! There are some unscrupulous operators out there! Over the Christmas break my family and I did the whole tree change/ sea change. We disconnected and reconnected our services, a bit of a pain but I thought this was an ideal time to review our suppliers and see if I could save some bucks on our gas and electrical bills. I used the sites…. www.goswitch.com.au and www.shoparound.com.au in my analysis, each site referred a different supplier for electricity, than the one we had used for the past 5 years. Naturally keen to save money I opted for a new supplier… it wasn’t until I received the bill from our past supplier did I realise I had been SCAMMED!

I have been charged a $90 earlier termination fee? What ‘earlier termination fee’…huh? I got straight on the phone to the company and soon discovered the scam.

When we first signed up with our electrical supplier we agreed to stay with them for 3 years in return we would greater receive discounts. What I didn’t know is that at the end of the three years they send out a letter, if you don’t respond to the letter they automatically roll you over into a new three-year contract – pretty sneaky hey. There is no verbal agreement, there is no signing on the dotted line, it’s a matter of hoping you get the letter they send, because if you don’t you’re locked in, the only way out is too pay the termination fee.

I was horrified to find, without my consent I have been locked into a contract and now face a $90 charge.  I have taken my case to the Energy and Water Ombudsperson for investigation, since I refuse to pay the termination fee….

But I wonder how many other businesses are out there locking their customers into paying for their products and services.

Sonia Williams a mother of two, qualified accountant and founder of the free online magazine Show Mummy the Money, designed to help mums, save, make and protect their money. You can access the current edition and past editions at www.showmummythemoney.com.au, simply click on the covers. She is the author of two books, Show Mummy the Money 2006, and Raising a Business 2007 available through all good book stores.

This information is correct at time of writing. It is general advice only and has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

#2 shimmershine

Posted 19 January 2009 - 05:13 PM



Posted 23 January 2009 - 11:45 AM

Hi There,

I work for an electricity retailer which does exactly this.

In the terms and conditions, which you initially agreed to, in order to get the discount, the renewal terms are listed.  Due to the number of customers who do not renew their contracts when they receive letters, auto-renewal ended up being the only viable option.  

You would find that the extension rate fees would be much higher than those of new contract rates, which should still provide you with some kind of discount.

All of the measures above have been in accordance with the energy supply regulations approved by the relevant government.

This might seem unfair, but people should be more aware of what they are signing, and also consider that it costs money to provide customers with discounts.

Let me know if there is anything I can answer for you.



Posted 23 January 2009 - 11:55 AM

Oh, and I forgot to mention, if you've left the premises, I believe you don't have to pay a termination fee at all.

You might want to check that.


#5 Angie1977

Posted 23 January 2009 - 01:20 PM

I had a similar thing happen recently. I changed electricity suppliers to Integral around 6 mths ago. When we moved house in October I received my final bill from the old premises with a $90 cancellation fee.

I couldn't understand why they would charge me a fee when I had only moved houses and was still keeping them as my supplier here in the new place. I was told it's just a system thing and they took the fee off my bill, leaving me with only $37 to pay (as I had just paid the previous bill before moving).

Makes it worthwhile to ask questions and be forceful in issues otherwise I may have just paid the fee and be $90 worse off.

#6 Kafkaesque

Posted 23 January 2009 - 01:25 PM

I guess this makes it a positive to be in Perth with only one supplier.

#7 ecb

Posted 23 January 2009 - 01:49 PM

As flash30aus said, this process is most likely included in the renewal terms of the initial contract and if so, you have, in a roundabout, way agreed to the roll over into this subsquent 3 years.  Also as flash30aus was getting at, there is nothing unlawful about this under Australian contract law.  In fact, it is very normal to have renewal terms included in an initial contract and automatic rollover is quite commen.


Australian contract law also allows for situations where the bargaining power is completely out of whack, as in this case.  As an individual you had no opportunity to negotiate your own terms and conditions and even had you tried the electricity company would have no process to handle such individual contract negotiations.  

So, whilst it is not unlawful to have terms like this in a contract, in situations like this it is rather unscrupulous - I believe the formal term used is in legal circles is "unconscionable".  

I hope the industry ombudsman assists you to a satisfactory outcome but I wouldn't stop there if they don't.  I'd definitely challenge the organisation using the above points.  It's very similar to banks and their ridiculous penalty fees.

Edited by ecb, 23 January 2009 - 01:51 PM.

#8 LuluG

Posted 23 January 2009 - 01:58 PM

This happened to us with our phone supplier and I was FURIOUS! I contacted the telephone ombudsman and had my contract terminated.
I hope the same happens for you, sneaky ars.........

#9 mamarama

Posted 02 March 2009 - 10:41 AM

My Mother (who is a pensioner) transferred to a different gas provider recently, one whom she had been with previously, and was charged $150 for a credit check.  She contacted the provider and they waived the fee.  Not quite the same situation, but another way that they try to scam money out of people.

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