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consumer

Utilities disputes: Fighting unfair power bills

Key Takeaway

In New Zealand, consumers disputing power bills are protected by the Consumer Guarantees Act 1993, which ensures services are provided with reasonable care and at a reasonable price, and the Fair Trading Act 1986, which prohibits misleading conduct and false representations. Disputes can be resolved initially with the retailer and, if unresolved, escalated to the Utilities Disputes Scheme.

Understanding Your Rights Regarding Power Bills in New Zealand

Consumers in New Zealand have rights and protections concerning electricity and gas services, particularly when facing what they perceive as unfair power bills. These protections primarily stem from the Consumer Guarantees Act 1993 (CGA), which provides guarantees for services, and the Fair Trading Act 1986 (FTA), which prohibits misleading and deceptive conduct by businesses.

Consumer Guarantees Act 1993: Rights Regarding Services

The Consumer Guarantees Act 1993 (CGA) is legislation that provides guarantees to consumers about the quality of goods and services. Under the CGA, when a consumer acquires services from a supplier in trade, certain guarantees apply automatically.

Reasonable Care and Skill

Suppliers of services, including electricity retailers, must carry out those services with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28(a)]. This guarantee can relate to the proper provision of the service and accurate billing practices.

Reasonable Price

If the price for a service is not agreed upon beforehand or cannot be determined by the previous course of dealing between the parties, the consumer is not liable to pay more than a reasonable price for the service [Source: Consumer Guarantees Act 1993, s 30]. This is particularly relevant when a consumer believes a power bill is excessively high without justification, such as an incorrect estimate or misapplication of tariffs.

Remedies Under the CGA

If a service fails to comply with a guarantee, the consumer may have a right to remedies. If the failure can be remedied and is not of a substantial character (meaning a failure that is serious enough that a reasonable consumer would not have acquired the service if they had known about the failure, or it departs significantly from the description or quality promised, or is unsafe [Source: Consumer Guarantees Act 1993, s 32A(2)]), the consumer can require the supplier to remedy the failure within a reasonable time [Source: Consumer Guarantees Act 1993, s 32(a)].

If the supplier fails to remedy the failure, or the failure is of a substantial character, the consumer may choose to:

  • Get the failure remedied elsewhere and recover all reasonable costs from the supplier [Source: Consumer Guarantees Act 1993, s 32(b)(i)].
  • Obtain from the supplier compensation for any reduction in the value of the service [Source: Consumer Guarantees Act 1993, s 32(b)(ii)].
  • Cancel the contract for the supply of the service [Source: Consumer Guarantees Act 1993, s 32(c)].

Consumers can also obtain damages from the supplier for any consequential loss (losses that are a foreseeable result of a breach of a guarantee or contract, beyond the direct cost of the faulty service itself) or damage resulting from the failure, provided that loss or damage was foreseeable [Source: Consumer Guarantees Act 1993, s 32(d), s 6].

Fair Trading Act 1986: Protecting Against Misleading Conduct

The Fair Trading Act 1986 (FTA) is legislation that prohibits misleading and deceptive conduct in trade and false representations. It protects consumers from unfair practices by businesses, including those related to billing for power services.

Misleading or Deceptive Conduct

No person in trade shall engage in conduct that is misleading or deceptive conduct (actions or statements in trade that are likely to lead a consumer into error) or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. This applies to how power bills are presented, explanations of charges, and any communications about pricing or service terms.

False or Misleading Representations

The FTA specifically prohibits false or misleading representations. For example, a person in trade must not make a false or misleading representation concerning the price of goods or services, the existence, exclusion, or effect of any condition, warranty, guarantee, right, or remedy, or the quality, standard, grade, quantity, or composition of goods or services [Source: Fair Trading Act 1986, s 13]. This means that information on your power bill or provided by your retailer must be accurate and not misleading.

Unsubstantiated Representations

A person in trade must not make an unsubstantiated representation (a claim made by a person in trade without reasonable grounds for making it) [Source: Fair Trading Act 1986, s 12A]. If an energy company makes claims about future prices, savings, or estimated usage on which a bill is based, they must have reasonable grounds to support those claims.

Remedies Under the FTA

If a person in trade breaches the FTA, a consumer may apply to the courts for various orders, including ordering the person to pay damages to the applicant for any loss or damage suffered, varying or cancelling a contract, or directing the person to repair or provide parts for goods [Source: Fair Trading Act 1986, s 43]. The Commerce Commission is responsible for enforcing the FTA and can take action against businesses that breach the Act [Source: Fair Trading Act 1986, Part 5].

Resolving Disputes Over Power Bills

If you believe your power bill is unfair or incorrect, there is a process for resolution:

Direct Communication with the Retailer

First, contact your electricity or gas retailer directly. Explain your concerns and provide any relevant information or evidence. Most retailers have an internal complaints process they must follow.

Utilities Disputes Scheme

If you cannot resolve the issue directly with your retailer, you can take your complaint to Utilities Disputes Ltd, which operates the Energy Complaints Scheme. This is a free and independent service for resolving complaints about electricity, gas, and water companies. It provides an impartial mechanism for consumers to address unresolved disputes with their utility providers [Source: Utilities Disputes Ltd website, Scheme Terms of Reference].

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and options in a dispute with a utility provider should consider consulting with an independent legal professional. Further assistance and information can be obtained from Community Law Centres or by contacting consumer protection organisations.

Key Resources