Energy retailer CovaU Pty Ltd (trading as CovaU) has been fined $341,724 for alleged unlawful cold-call telemarketing that aimed to win back former customers.
The Essential Services Commission alleges that between February 2023 and March 2024, CovaU contracted a third party to cold-call former customers and offer short-term discounts to entice them back, otherwise known as ‘win-back’ offers.
Cold-calling and win-back offers were banned in 2021 as part of a suite of changes to protect Victorian energy customers from high-pressure sales tactics.
The commission was alerted to CovaU’s alleged conduct in February 2024 after a former customer reported being cold-called and offered discounts to return to CovaU as their energy provider.
CovaU was fined in relation to prohibited conduct affecting 8 Victorian customers.
In response to the investigation, CovaU has ceased engaging in the alleged conduct, terminated its contract with its telemarketing firm and taken proactive steps to improve its compliance relating to unsolicited sales, record keeping and self-reporting obligations.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
“Predatory sales tactics can cause significant financial and emotional distress to Victorian consumers. They also reduce trust in the market by only providing better deals to those that leave, while loyal customers miss out.”
“The $341,724 fine paid by CovaU reflects the seriousness with which the Essential Services Commission treats the obligations of energy retailers. Wrongdoing has consequences, and we make sure they are felt.”
“The Essential Services Commission expects energy retailers to have systems in place to ensure they are abiding by the law, especially where third parties are utilised to engage with customers. Keeping consumer protections front of mind is paramount – particularly given the current cost-of-living pressures faced by Victorians.”
ENDS
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Essential Services Commission Media contact:
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Phone: (+61) 437 677 385