Aussie Government Watchdog Alleges Sumo Power Misrepresented Renewable Energy Costs

Guest essay by Eric Worrall

The Australian Competition and Consumer Commission has launched legal proceedings against Sumo Power, accusing them of enticing domestic customers into heavily discounted energy supply contracts, while concealing a standard business practice of slamming customers with a 35-40% price hike after they have received their first few electricity bills. Sumo sent alleged victims of this scam a booklet which claimed the price hikes were due to climate change, ageing coal assets and power plant closures.

Sumo Power allegedly misled consumers about electricity pricing

5 August 2020

The ACCC has instituted proceedings in the Federal Court against Sumo Power Pty Ltd (Sumo) alleging it made false or misleading representations to Victorian consumers in relation to its electricity plans.

It is alleged that between June and November 2018, Sumo promoted 12-month electricity plans with low electricity rates and large ‘pay on time’ discounts of up to 43 per cent to residential consumers, while planning to substantially increase the prices charged to those consumers who signed up within a few months, or knowing it was likely to do so.

The ACCC claims that Sumo represented to consumers that it would maintain, or not materially increase these low rates and consumers would get the benefit of the ‘pay on time’ discount for 12 months.

However, in November 2018, Sumo substantially increased the underlying rates for certain consumers, by approximately 30 to 46 per cent. The ACCC alleges the price increases were in line with a pre-determined strategy, which Sumo had not disclosed to consumers. The ACCC also alleges that the price increases substantially eroded or eliminated consumers’ pay on time discount. 

“We allege Sumo enticed consumers to enter into electricity plans with the promise of low cost electricity prices, while planning a significant rate increase which meant consumers were charged significantly more for their electricity than they were led to expect,” ACCC Chair Rod Sims said.

It is also part of the ACCC’s case that Sumo subsequently misled consumers when advising them that the price increases were due to wholesale energy cost factors including generation cost rises and “climate change and ageing assets forcing the closure of cheap coal fired power stations”.

Sumo used telemarking agents to cold-call residential consumers and promote its electricity plans. The ACCC claims that, acting on behalf of Sumo, the telemarketing agents represented they were independent and would perform a comparison of plans across a number of retailers, when in fact they were contracted by Sumo to sell Sumo plans.

“Electricity bills are a major household expense for many consumers,” Mr Sims said.

“We allege that consumers were likely to have been convinced to switch to Sumo, acting on recommendations from purported independent consultants when in fact they came from Sumo telemarketing agents.”

The ACCC is seeking penalties, declarations, publication orders, compliance program orders, consumer redress, and legal costs.

Background

Sumo is an Australian owned energy retailer, which began operating in early 2015.

These proceedings relate to Sumo’s promotion of 27- 43 per cent ‘pay on time’ discount plans, which were promoted to residential consumers in Victoria from at least June to November 2018.

During the relevant period, Sumo contracted a number of telemarketing agents to sell Sumo’s plans. Sumo has since ceased using these agents.

The attached document below contains the ACCC’s initiating court document in relation to this matter. We will not be uploading further documents in the event this initial document is subsequently amended.

Concise Statement

ACCC v Sumo Power Pty Ltd_Concise Statement ( PDF 677.75 KB  )
Release number: 162/20ACCC

Infocentre: 

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Media enquiries: Media team – 1300 138 917

Source: https://www.accc.gov.au/media-release/sumo-power-allegedly-misled-consumers-about-electricity-pricing

Reading the concise statement, the ACCC claims Sumo sales people misrepresented themselves as independent consultants to deceive customers into thinking they were receiving objective advice.

The ACCC claims Sumo secretly maintained three books. New customers were allegedly added to the front book, the cheapest rates, then progressively migrated to the mid book, then the back book. The ACCC alleges customers were not informed the price hikes were pre-planned when they signed up to Sumo’s pricing scheme.

There is no doubt renewable energy has hurt ordinary consumers. It doesn’t matter how cheap renewables become, the need to maintain a complete duplicate set of dispatchable fossil fuel power infrastructure on hot standby is a fatal blow to any claims that renewables are cheaper.

But the alleged crimes Sumo committed are a reminder, don’t be too ready to believe that your latest electricity price hike is just because of the cost of renewables.

46 thoughts on “Aussie Government Watchdog Alleges Sumo Power Misrepresented Renewable Energy Costs

  1. Is the Aussie government starting to wake up to the CAGW unreliable energy scam? One can only hope!
    I’ve never had the chance to visit the land down under but was always been told it was great, nice mates and beautiful Sheilas; kind of like Texas only bigger! If this keeps up they might still be free and prosperous when my opportunity arrives!

    • Come on down under mate. Beer is cold, Wines are the best in the world, Coonawarra and Barossa reds are to die for. We have a town called Texas. Good spot to visit. Blokes are friendly so long as you shout a beer or two and don’t hit on their sheilas. The sheilas are all good sorts so it can get a bit out of line. We have a canyon bigger than yours but no one knows about it. Our snakes are deadlier then yours. Spiders too. But we do have dipshit pollies. Can’t help bad luck.

      Come on down, I’ll chuck a few snags on the barbie, crack a few VBs, rip the cork out of a Barossa shiraz, and Bobs your uncle.

      • I hear you carry knives as big as school busses. “That’s not a noif”. THIS is a noif”.

      • Oz has 5 of the top 10 deadliest snakes, 3 of the top 10 deadliest spiders,deadly jellyfish, deadly stingrays, deadly cone snails and 30 foot shark-eating crocodiles… but calls itself “the lucky country”

        • OMG, you can’t forget the Cassowary can rip out your gut,
          the cone shell has conotoxin, one of the most deadly toxins in the world,
          their crocs are vicious,
          bats that are measured in kilograms,
          those spiders include ones that trap birds,

          and cute Bilby’s that look like a hybrid of a rabbit, a possum and a 4 pound mouse.

          I don’t think I could . .. go in the bush there simply out a sheer fear.

          • A few years ago we spent out sabbatical in Oz. The treatment protocol they developed for venomous bites involve recognizing that the poison travels in the lymph. Therefore, you immobilise and apply a pressure bandage for transport to hospital. The wound must not be washed or touched so that when you get to hospital they can identify the toxin using a fast immunological test. Then you get antivenom. Australia is a major world producer of antivenoms.

            With this protocol, the death rate for poisonous bites is less than that for salt water crock deaths. The latter typically involve males with a high blood alcohol level and their flys undone.

            I was very impressed by the water safety program. In highschool, our daughter was required to swim 10 pool lengths in her clothes and also pull another person out – this was routine and her school’s turn for the pool came on a freezing May day with the wind blowing off antarctica. It was not cancelled.

      • Loved VB when I was there in 2004

        I ran into the Tamworth music festival and drove up to the southern tip of the GBR and back to Sydney
        4500km and barely scratched the map

        Just like here in canada, but your Kangas are bigger

  2. Sumo is not the only company engaging in this sort of practice. The ‘renewable’ energy industry is riddled with misrepresentation, fraud and corruption. Consumers are the dupes of the CO2 ‘Climate Change’ hysteria and scam. The consumers dance to the tune of the ‘Global Warming’ Pipers, open their wallets and say after me “Help yourself!”

      • Heh Nick, claims of CAGW are ‘extraordinarily shonky’.

        Glad we could get that distinction ironed out.
        =============

      • Has nothing to do with renewables but can supply energy from wind and solar and pays solar feed-in tariffs too. Yup, nothing to see there, move along.

    • Any excuse will do. Enron was particularly adept at gouging.

      Enron traders were revealed as intentionally encouraging the removal of power from the market during California’s energy crisis by encouraging suppliers to shut down plants to perform unnecessary maintenance, as documented in recordings made at the time. These acts contributed to the need for rolling blackouts, which adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail customers. This scattered supply increased the price, and Enron traders were thus able to sell power at premium prices, sometimes up to a factor of 20x its normal peak value.
      link

      Hey we’re sorry you’re paying so much but it’s not our fault it’s … (fill in excuse here). Climate change, ageing assets, supplier maintenance … any excuse will do.

      In this case it really is climate change/renewable power. The ageing cheap coal plants can’t be replaced with new cheap coal plants because of climate change.

      • It’s a shame that all the FEC papers relating to the Enron case were kept in WTC7 , which mysteriously imploded on that fateful day for no good reason.

          • MarkW, it wasn’t exactly “hit by one of the other towers”. They both fell into their own footprints, as though their support column backbones had been suddenly shredded top to bottom, which is kind of odd to say the least. But, shrapnel did hit WTC 7. Did shrapnel cause that tower to collapse? Was it constructed of balsa wood and playing cards, perhaps?

          • Take a look at the video, there is a sizeable (as in several stories high) hole in the side of WTC7 after the main towers collapsed. There was also a fuel oil fire that was started when the tank for the back up generator was ruptured.

          • In this case “shrapnel” consisted of blocks of steel and concrete weighing hundreds of pounds to several tons.

          • WTC7 was controlled demolition and fell faster than free fall. If you find a video and look at the roof line you will see the plant room falls first because they took out the lift shafts first.

          • “because they took out the lift shafts first.”

            “They”?

            You know, “they” seem to be involved in all sorts of stuff. Pick your conspiracy theory. “They” are involved in every one.

  3. “Aussie Government Watchdog Alleges Sumo Power Misrepresented Renewable Energy Costs”

    Does it allege that? Sumo is not a renewables company. This is just a routine energy retailer scam. The only claim is that, when challenged on price rises, they claim “climate change and ageing assets forcing the closure of cheap coal fired power stations”. And the ACCC says they are lying.

    • if people in authority lie, and others (hint) spend their time justifying those lies, then the mass of society will think that lying is no big deal…..

      And that is how cultures disintegrate. Just read about the actions of the last Roman Emperors. Count how many Emperors after Commodus died of natural causes….

      • Sumo are not “people in authority”. They are just a bunch of folks trying to make money. And yes, sometimes people doing that are not honest. It is “people in authority” who are seeking to identify and sanction the lies.

        • LOL. That would be the same ”people in authority” who keep telling us the world is going to end in ten years. So we need a green new deal to tackle ”social and economic inequality” to solve a ”climate emergency”…. Give me a break.

        • Nick,
          Have a read of the 30 July 2020 AEMO roadmap for the next 20 years of Australian electricity. Then run your eye over it with your integrity ruler to form your own opinion of whether it it scientifically valid. To me it reads like sedition. How about you?
          These at AEMO are also a bunch of people wanting to make a quid for themselves. They also have a requirement to be accurate as opposed to pushing iseology. They might benefit from some ACCC investigation also. Geoff S

  4. “….But the alleged crimes Sumo committed are a reminder, don’t be too ready to believe that your latest electricity price hike is just because of the cost of renewables….”

    Yes, they are.

    Humans operate in societies, with leaders. The leader sets the tone for the society.

    If you have Victorian or Puritan leaders, then honesty will be an important ethos, and people will generally abide by the law.

    if you have immoral lying leaders, who let fraudulent science drive their acquisition of personal wealth, then people will generally think that lying is not such a bad thing, and might be quite acceptable if you mention the words ‘Climate Change’. After all, you are lying in a good cause, and this has been proposed by climate ‘experts’ often enough…

    If I were Sumo, I would simply say that I was following government directives to lower the use of energy, and accuse the prosecutors of being racist climate deniers applying white privilege….

  5. ACCC is only pursuing this because of the number of complaints. Retail Energy sector is in breach of s52 every other day. ACCC are totally corrupt and in bed with the green lobby and politicians. Sumo have little to fear.

  6. “the need to maintain a complete duplicate set of dispatchable fossil fuel power infrastructure on hot standby is a fatal blow to any claims that renewables are cheaper”

    Or that renewables can replace fossil fuels.

  7. Sounds like my old Dish account. Started out at $45/mth and in a few years was at $80/mth. It’s something the cable and satellite companies do to their customers over time, just not as fast at SUMO.

    As fast as the US government is dropping large volumes of money into the economy without a matching increase in total wealth of the country, we will be facing a much worse increase in everything we purchase than what SUMO is hitting their customers with. Maybe it was something that had to be done, but when the economy recovers some we could be in for a wild ride.

  8. At some point, utility regulators will have to start pricing renewables fairly, to account for the cost of maintaining fossil plants at the ready when the wind or sun die.

  9. mate got her powerbill the other day
    around 900$ for 3mths one person home WITH solar panels
    if she pays on due date?
    bill is magically only…only? 500
    so thats a big red flag of the ripoffs and thats a large company doing it.
    my bill for 3mths no pv(but i also dont run a clothers dryer, or a NOT cheap rev cycle heater)
    is 225$
    and fully 1/3 of that in fact slightly more than 1/3 is CHARGES NOT power I use.!

  10. Does Sumo have customers that are not on these “plans”? If so, did these customers also see rate hikes at the same time?

  11. Why are the board members at Sumo not before the courts for fraud? Board members are liable for the illegal actions of the company. Set an example, send some rich people to prison and you will find a much more responsible attitude in corporate governance.

    Fining a company has little effect. It simply gets deducted as an expense and encourages more elaborate schemes in the future.

  12. Ho, hum. Why am I not at all surprised by this? It has happened before and will happen again, and again, and again . . .

  13. My biggest financial regret about the advent of wind & solar power plants being connected to consumer grids is that I didn’t buy up shedloads of carpet bags to flog to the producers, wholesalers & retailers of “green energy” 😢

  14. enticing domestic customers into heavily discounted energy supply contracts, while concealing a standard business practice of slamming customers with a 35-40% price hike after they have received their first few electricity bills.

    The same thing has happened here where I’m at in the US, after the “deregulation” of electric-providers. Maybe not 35-40%, but certainly a substantial price-hike after a couple months. Just another symptom of the breakdown in ethics and morals.

  15. All power suppliers are in to price gouging here in Aus, you can’t escape it. The ACCC has no real teeth to do anything anyway so it’s a case of being seen to be doing something but nothing will change the way these companies operate.

  16. I moved in to my own place a few months ago, a unit, single person. I just paid my first power bill for 101 days of supply.

    381 kWh at AU$0.296879 is AU$113.11
    Supply charge AU$0.847000 per day is AU$85.55
    Discount of 16% AU$31.79 credit
    Total bill for 101 days AU$166.87

    All that includes a GST of AU$15.17.

    Water heating is my biggest consuming appliance. But AU$0.29 is still pretty pricey and will only get more expensive as reliable power is replaced with renewables here in Australia.

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