Business

Genesis Energy attempted banned ‘win-backs’

Genesis Energy attempted at least 220 banned win-backs, including two alleged attempts more than two weeks after the practice was banned, Marc Daalder reports

The Electricity Authority has commenced an investigation into Genesis Energy attempting to win back customers on the first day the practice was banned.

In a notice of the investigation, the EA said Genesis had admitted to attempting "approximately 224 win-back attempts to customers from 20 different electricity retailers. Genesis was successful in winning back 25 customers across 12 electricity retailers."

"Genesis discovered it had incorrectly interpreted the effective date of the saves and win-backs Code amendment as 1 April 2020 rather than 31 March 2020," the energy market regulator wrote. However, Electric Kiwi alleges that two of the breaches occurred in mid-April, raising further questions about Genesis' behaviour.

Win-backs, in which power companies entice former customers to return with steep and exclusive discounts, were banned by the EA in February. The ban, which prevents retailers from targeting former customers with marketing for 180 days, came into effect on March 31.

The prevalence in such 'win-backs' skyrocketed in the years after the EA launched the voluntary Saves Protection Scheme, which sought to ban 'saves'. Saves occur when a retailer about to lose a customer offers them an exclusive deal.

These dropped in prevalence after the protection programme stopped retailers from offering saves to customers who were switching to retailers that had opted in to the scheme. Retailers then turned to win-backs, offering such deals to customers immediately after they had formally switched. At the end of March, the Saves Protection Scheme was expanded to all retailers, in addition to the win-back ban.

The EA was first notified of the breach on April 1 by Flick Electric, after Genesis allegedly called a customer who had switched to Flick on March 25 and offered them a lower price than they were now paying. The customer declined and reported the attempt to Flick, according to the independent retailer.

Genesis then acknowledged on April 17 that it had misunderstood the date the ban came into effect and said it had made approximately 224 attempts.

"Unfortunately, due to a human error in interpreting the timing of when the new rules were to take effect, our protocols to ensure compliance didn’t start until 1 April, which was 24 hours after the rules came into force on 31 March," a Genesis spokesperson said.

"We are very sorry this has happened, we had adapted our internal processes and systems in preparation for the code change months out and our intention has and remains to comply fully with the code as we know how important this is."

On April 24, Electric Kiwi filed a further complaint about seven breaches, some of which were new. Two of these occurred in mid-April, Electric Kiwi chief executive Luke Blincoe told Newsroom.

"With regard to the alleged breaches below, we’re currently working through the information provided by the Authority. At this point it is not clear whether these cases are in fact breaches," the Genesis spokesperson said.

"Two of the seven breaches that we've alleged occurred on the 15th and 16th of April. In the first case, it was for a customer that didn't actually switch to us until the 15th of April and received a counter-offer [the same day]. And the other one was for a customer that switched to us in January but received a counter-offer on the 16th of April, within that 180-day period," Blincoe said.

"So I think there's more than just a 24-hour error here. It requires investigation and if breaches are found, I think the Electricity Authority needs to show that they mean business on this stuff. There's just no point to changing the code unless you're going to enforce it to create sufficient incentive for compliance."

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