A utility connection provider that promises a “real choice of services” has angered customers by preferencing an energy company with an undeclared ownership stake in the business.
ConnectNow faces legal action from one customer who complains they were directed to connect with TruEnergy, a 50% stakeholder in ConnectNow. Crikey has also received complaints that TruEnergy was recommended over cheaper electricity provider deals.
Consumer advocacy group Choice warns customers about the lack of transparency from ConnectNow and other service connection and comparison websites. But ConnectNow says it offers customers the best deals regardless of its ownership.
One customer wrote to Crikey when they were directed by ConnectNow to contract TruEnergy: “I asked whether that recommendation was based on price. They said ‘yes’. I later discovered that they are 50% owned by TruEnergy and that there are many other cheaper companies (but they do not offer connection to any of them — surprise!).”
ConnectNow general manager Scott Kessler rejects any suggestion the company is a front to funnel customers into TruEnergy. But he confirms the company has received a legal letter from a customer complaining about the conflict. The company is considering the action.
Kessler admits TruEnergy and other providers have targets built into their partnership with ConnectNow. But he says consumers are recommended services from a “panel of providers” based on factors including price and service delivery. “We would never say it’s just on price necessarily,” he told Crikey.
“Our biggest risk in the business is the power’s not turning on,” he said, noting customers are assured “service guarantees” are in place from a service that has “no cost to the consumer”.
Of the TruEnergy ownership: “I don’t think from a consumer perspective in general they’re necessarily concerned with the ownership structure behind the business. We don’t try and hide it … We believe it’s a fair and equitable approach for everyone.”
As a ‘one-stop shop’ for those moving house, the ConnectNow website lists several energy provider “partners” including AGL, Australian Power & Gas and Supagas, along with telecommunications, insurance and removalist companies. But it doesn’t disclose TruEnergy as an owner of the business.
ConnectNow also operates under different brands, including R&W Connect and Ray White Connect — both “powered by ConnectNow”. Other utility connection services including Go Switch, Utility One, On The Move and Moving Soon don’t reveal any ownership conflict on their websites and didn’t return Crikey‘s calls by deadline.
Another provider, Direct Connect, is owned by Infratil Energy Australia. According to Tom Fraser of its marketing team, Infratil doesn’t have any ownership of any its partners but he confirmed the company is paid by providers for its services on a contract basis.
Christopher Zinn, from Choice, advocates a code of practice for customer comparison and connection services — a growing area of service delivery, he says — and companies should disclose conflicts in their ownership. (Kessell notes ConnectNow “doesn’t claim to be a price comparison site; we have a preferred panel model” unlike other companies.)
“Where they are ranking or providing information they need to be very transparent about the relationship they have with their providers and if it affects the ranking of those providers,” Zinn told Crikey. “If they are they should be proud of that fact and not hide it away.
“They might claim it’s not an information service, it’s an advertising service. But it’s a blurring of the lines.”
A spokesperson for Consumer Affairs Victoria, where ConnectNow operates, warns: “Consumers need to shop around and make sure they’re informed.”
First they sell off the State Electricity Commission. Then we have to choose between different energy retails. Young Indians some knocking on our door every other day wanting to offer us a special discount if we spend time with them looking through our bills.
And now we have to worry about the companies that are supposedly there to help us make these choices.
How do we choose between companies that help us choose between energy providers?
Enough choice already! CAPITALISM GONE CRAZY!
Our biggest risk in the business is the power’s not turning on,” he said, noting customers are assured “service guarantees” are in place from a service that has “no cost to the consumer”.
What a ridiculous statement. So every electricity provider will have a direct line to my house, as well as their own cables and infrastructure? What about if my neighbour was with AGL lets say. Unless there was something wrong with the grid, why would my power be off when theres was on?
Power providers all run on the same grid. All they do is check my meter and charge me ridiculous amounts for how far it’s ticked. Unles they’ve invented a way to deliver specific currents and volts through the wires, and keep them separated from all the others, I’m pretty sure that if TRU go down for an hour or so, it won’t matter to the individual households connected to the whole grid.
BTW I am with TRU and currently looking for a new provider after they increased the Tier 3 summer rates by MORE THAN 20% in one hit.
I had a funny story with TruEnergy – moved into a new place, called Energy Australia and got them to connect the power, as had previous credit history with them. All done, with a couple of glitches re switching on the mains. Over 6 months got a bunch of letters from TruEnergy which I disregarded as junk mail. Finally got a note in my mailbox one day saying they had disconnected my power. Checked inside, power still connected. Phoned them to ask them WTH was going on. They claimed they ‘owned’ the meter and that Energy Australia had never wrested it from them, so I’m obliged to use them, and I owed them some backbills as well. I had a laugh, and asked them what their rates were anyway, and wrote them down. Then phoned Energy Australia, and got their rates, which were considerably lower. Consumer choice was to go with my original pick. Turned out Energy Australia had not been able to wrest the meter from them in the first month, had given up, then forgotten to tell me. Consequence: no power bills for 9 months while TruEnergy write me nagging letters that went unopened. I thought Energy Australia were direct-debiting my account all that time, as I’d asked them to, so I wasn’t looking out for power bills. Anyhow, this happens some nine months in. Energy Australia phoned TruEnergy and forced them to pay them for some period, and the result was I was waived 6 months of power bills altogether. Happily with Energy Australia now.
The phone operators at TruEnergy sounded very weasely and dodgy when I spoke to them throughout, like they were up to something. Sort of talking up their sleeves. They’re Melbourne based. They all had mysterious accents too.
And what’s this thing about ‘meter ownership’ — worthy of more investigation.
Interesting consumer world we live in in these days in this country, no?