Our Flicksters know we’ve fought for a fairer electricity industry for a good few years now, and we were super encouraged when a ban on win-back activity - one of the major regulatory changes to even the playing field - kicked off on March 31, 2020.
The ban on win-backs, which was recommended in the Government’s Electricity Price Review (EPR) last year, now means that power companies have to wait 180 days before they can contact customers who’ve left them to try and entice them back with supercharged counter-offers or ‘win-backs’.
Why, though? Unfortunately, the use of win-backs has escalated the problem of a two-tier market which disadvantages those customers who stay with the same retailer. Customers who frequently switch retailers receive better deals and lower power prices, in comparison with those who don’t switch and pay higher charges to prop up the win-backs model (you can read more about it over on our winback blog, here). Not cool in our opinion - and something that impacts a heap of New Zealanders, with between 400,000 - 750,000 households having never switched retailers since 2002!
So, when we were notified by one of our new and awesome Flicksters that they’d been contacted by their former power company, Genesis, and offered a lower power price on March 31 - the day the win-back ban began - we were frustrated to say the least. As it turns out, that same power company had gone on to contact a total of 224 customers that same day who had also made the switch to new retailers (according to the Electricity Authority, 25 of those win-back attempts were successful).
As Chief Flickster, Steve, says, “It’s disappointing to have a big player flouting the rules. We’d noticed via our lost customer feedback [feedback from customers who have left Flick] that this behaviour was taking place, but we were hopeful that it was a lag in switching and not a breach of the new regulations - after all, they’re in place to maintain healthy competition and ultimately protect customers. 224 calls in one day alone shows just how much some companies used this tool and the impact it could have on competition.”
While human error has been cited as the main reason for this wrongful win-back activity, for us it highlights just how heavily retailers have relied upon win-backs to keep customers in the past. And, as Steve points out, they’ve used this tactic rather than putting customers first and offering them the best and fairest power prices they can right from the get-go.
“The new rules are good practice for any business that cares about delivering the very best they can to their customers. We’ve always ensured we’re offering our customers the very best we can all of the time so we know if they choose to leave there’s nothing more we can do to keep them.”
So, what now? The Electricity Authority has appointed an investigator to look into the breaches, and the report will go before a Compliance Committee in early August. And we’re hopeful that the changes will now encourage more power companies to take care of their customers and offer better prices from the beginning, rather than waiting until they leave - something we’ve been doing here at Flick since day one!
“It will now be a matter of watching the market to see if the ban of 180 days is long enough to create long-term change to the way some companies operate, but it’s positive to see changes like this that we’ve campaigned for being implemented in the electricity market.”