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364 The Law HandbookIf a customer does not have a contractwith a retailer and is using energy at thesite, a deemed customer retail arrangementis taken to apply between the customer andthe current retailer of the site. This canhappen where they have moved into a siteand failed to open an account, or theircurrent market retail contract has expiredand a new contract has not been enteredinto (NERL, s 54(2)). The current retailer ofthe site has a number of obligations to fulfillas soon as they are become aware thatenergy is being consumed. These includeinforming the customer of the terms andconditions of the deemed customer retailarrangement, the customer’s options forestablishing a contract and their right todisconnect (NERR, Rule 53).[11.260] Choosing the rightcontractIf considering a market retail contract, customersshould consider:• the prices at which energy will besupplied, and whether prices are calculatedaccording to levels of usage (blocktariffs) or according to peak and off-peakusage times (time-of-use tariffs)• the cost of the service to property charge(Service Availability Charge SAC)• duration and expiry date of the contract• the arrangements when the contractexpires• any price adjustments over the life of thecontract• fees for early termination, late payment,dishonoured payment, move in/out, specialmeter reading, meter test, disconnectionand reconnection (see Late paymentfees at [11.360])• solar feed-in tariff rates• billing frequency (for example, monthlyor quarterly)• payment options (for example, BPay,Centrepay, direct debit, post office) andassociated fees• security deposit requirements.Customers have a “cooling off” period of tendays in which to cancel a market retailcontract without incurring any penalty (seeChanging your mind at [11.320]).Customers should note that transfers fromone retailer to another may not take placeimmediately, as the new arrangement willgenerally be from the next scheduled meterreading (which should be no more than90 days).For an immediate transfer, the customercan ask whether the retailer can do a specialmeter read. This service generally incurs afee (see Miscellaneous charges at [11.370]).[11.270] Security depositsEnergy retailers may request a securitydeposit when a new account is opened. Forresidential customers this can only occur atthe start of the contract, while for smallbusiness customers this may occur at thestart of or during the term of the contract(NERR, Rule 40(1)).The retailer can only request a securitydeposit under any of the following circumstances:• the customer owes money to that retailerand this is not in dispute• the customer has fraudulently acquiredenergy within the past two years• the customer has refused to provideacceptable identification• the retailer reasonably considers that thecustomer has a poor credit history• the customer has refused the retailerpermission to obtain a credit check• the customer has been offered a paymentplan and declined it or failed to pay aninstalment• the retailer reasonably considers that thecustomer has no history of or has a poorrecord of paying their account (for businesscustomers) (NERR, Rule 40(2)).If a retailer requires the customer to pay asecurity deposit because they consider thatthe customer has a poor credit history, theretailer must tell the customer that they candispute the decision (NERR, Rule 40(5)).The retailer cannot require the customerto provide a security deposit where theyhave been identified as a hardship customerby any retailer (NERR, Rule 40(3)).
11 Consumers 365Standard retail contractsIf a customer has entered a standard retailcontract, retailers must not require a securitydeposit of more than 37.5% of the customer’sestimated bills over a 12 month period.This estimation is based either on thecustomer’s billing history or the averageusage of a comparable customer over acomparable 12 month period (NERR,Rule 42(1)).Retailers are required to refund the securitydeposit, together with accrued interest,within 10 business days after a residentialcustomer completes one year of on-timepayments. Business customers are entitledto a refund when they complete two yearsof on-time payments.Customers are also refunded when theymove out, transfer to another retailer orrequest disconnection, provided the securitydeposit is not required to settle the final bill(NERR, Rule 45).Market retail contractsIf a customer has entered a market retailcontract, information about the collectionand return of security deposits will be in thecontract.[11.280] Marketing and transfersEnergy retailers and their marketing agentsmay approach customers in person by doorknocking or at shopping centre kiosks, bymail, online or by phone to sell market retailoffers.[11.290] Customer choice andexplicit informed consentA customer who is approached by a retaileror their marketing agent is not obliged tosign or agree to any contract. Customerswho decline to take up an offer will continueto receive electricity and gas services fromtheir existing retailer.A retailer must obtain the customer’sexplicit informed consent before they enterinto a market retail contract (NERL, s 38).This involves clear, full and adequate disclosureof all matters relevant to the consent ofthe customer (see Marketers must discloseinformation under [11.300]), and the customergives their consent to the offer (NERL,s 39(1)(a)).Consent can be given:• in writing, signed by the customer• verbally, so long as the verbal consent canbe verified and made the subject of arecord (eg a voice recording)• by electronic communication generatedby the customer (eg an email) (NERL,s 39(2)).The retailer must retain a record of theconsent for two years and must provide acopy to the customer on request (NERL,s 40).Customers who query whether explicitinformed consent was provided must raise acomplaint within 12 months of thetransaction. Customers can ask the retailerfor proof of their consent and if it is notproduced within 10 business days or theretailer otherwise admits that it was notobtained, the contract is void. The retailercannot recover any amount for any energysupplied as a result of the void transaction(NERL s 41(a), (b) and (c)), subject to theinformation below.For electricity customers: The retailer shouldtransfer the customer back to their previousretailer, however this depends on the lengthof time which has passed since the voidtransaction occurred:• if the transaction occurred less thansix months ago, market procedures allowthe retailer to retrospectively transfer thecustomer back to their previous retailer.This places the customer in the sameposition they were in before thetransaction, and they will be billed by theprevious retailer for the energy suppliedas if the transaction had not occurred.Any payment made to the retailer mustbe transferred to the previous retailer
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