A utility connection provider that promises a “real choice of services” has angered customers by preferencing an energy company with an undeclared ownership stake in the business.
ConnectNow faces legal action from one customer who complains they were directed to connect with TruEnergy, a 50% stakeholder in ConnectNow. Crikey has also received complaints that TruEnergy was recommended over cheaper electricity provider deals.
Consumer advocacy group Choice warns customers about the lack of transparency from ConnectNow and other service connection and comparison websites. But ConnectNow says it offers customers the best deals regardless of its ownership.
One customer wrote to Crikey when they were directed by ConnectNow to contract TruEnergy: “I asked whether that recommendation was based on price. They said ‘yes’. I later discovered that they are 50% owned by TruEnergy and that there are many other cheaper companies (but they do not offer connection to any of them — surprise!).”
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ConnectNow general manager Scott Kessler rejects any suggestion the company is a front to funnel customers into TruEnergy. But he confirms the company has received a legal letter from a customer complaining about the conflict. The company is considering the action.
Kessler admits TruEnergy and other providers have targets built into their partnership with ConnectNow. But he says consumers are recommended services from a “panel of providers” based on factors including price and service delivery. “We would never say it’s just on price necessarily,” he told Crikey.
“Our biggest risk in the business is the power’s not turning on,” he said, noting customers are assured “service guarantees” are in place from a service that has “no cost to the consumer”.
Of the TruEnergy ownership: “I don’t think from a consumer perspective in general they’re necessarily concerned with the ownership structure behind the business. We don’t try and hide it … We believe it’s a fair and equitable approach for everyone.”
As a ‘one-stop shop’ for those moving house, the ConnectNow website lists several energy provider “partners” including AGL, Australian Power & Gas and Supagas, along with telecommunications, insurance and removalist companies. But it doesn’t disclose TruEnergy as an owner of the business.
ConnectNow also operates under different brands, including R&W Connect and Ray White Connect — both “powered by ConnectNow”. Other utility connection services including Go Switch, Utility One, On The Move and Moving Soon don’t reveal any ownership conflict on their websites and didn’t return Crikey‘s calls by deadline.
Another provider, Direct Connect, is owned by Infratil Energy Australia. According to Tom Fraser of its marketing team, Infratil doesn’t have any ownership of any its partners but he confirmed the company is paid by providers for its services on a contract basis.
Christopher Zinn, from Choice, advocates a code of practice for customer comparison and connection services — a growing area of service delivery, he says — and companies should disclose conflicts in their ownership. (Kessell notes ConnectNow “doesn’t claim to be a price comparison site; we have a preferred panel model” unlike other companies.)
“Where they are ranking or providing information they need to be very transparent about the relationship they have with their providers and if it affects the ranking of those providers,” Zinn told Crikey. “If they are they should be proud of that fact and not hide it away.
“They might claim it’s not an information service, it’s an advertising service. But it’s a blurring of the lines.”
A spokesperson for Consumer Affairs Victoria, where ConnectNow operates, warns: “Consumers need to shop around and make sure they’re informed.”