A dramatic increase in the number of Victorian households experiencing involuntary electricity and/or gas disconnections has prompted a review of disconnections by the Victorian government. This research into the direct and indirect costs that arise from disconnections was commissioned by the Consumer Action Law Centre and contributed to their 'Heat or Eat' report.
Summary of key themes
1) Disconnections were part of complex family, health and financial circumstances. Disconnections did not occur in a vacuum: participants were typically experiencing numerous financial stresses at the time when they were disconnected, and these were often intertwined with complex crises. Domestic violence was often a contributing factor.
2) Inadequate retailer responses and practices. Participants' reports indicated numerous deficiencies in retailer practices including demands for unreasonable upfront and ongoing payments, lack of information about services and concessions which could assist householders, and aggressive marketing practices.
3) Impact on mental health and wellbeing. Disconnections caused significant distress for most participants. Participants experienced feelings of shame, humiliation, fear and anxiety. The disconnection events compounded existing mental health issues and had a serious impact on participants’ wellbeing.
4) Financial impact. Disconnections resulted in various extra costs for participants that made it harder to get out of debt and avoid future payment defaults and disconnections. In addition to disconnection and reconnection fees, less obvious costs included: replacement of spoilt food; take-away meals for the family; use of public laundries or BBQs; phone calls; entry to public facilities to shower; and purchase of candles, blankets and other goods to manage in the absence of heating, lighting etc.
5) Impact on dependants. The disconnections often impacted children. Parents struggled to provide food and worried about the health and emotional impact on their children.
6) Financial counsellors and the Energy and Water Ombudsman Victoria. Financial counsellors and/or EWOV eventually assisted negotiations for participants and usually achieved outcomes that participants had not been able to. However, it took time to find this assistance because participants were unaware of these services or where to look for them.