Coronavirus: Power companies, telcos won't disconnect customers during Covid-19 outbreak

Tuesday, 28 April 2020

New Zealanders struggling to keep up with phone and power bills during the coronavirus outbreak are unlikely to be penalised, Consumer NZ has found.

But organisations helping Kiwis navigate the turbulent economic waters say the businesses need to be more proactive in supporting vulnerable customers.

With residential power bills expected to increase by $3 to $6 a week during the lockdown period, 15 social services organisations, including Consumer NZ, called on power companies and telcos to help customers under financial pressure.

As well as asking them to drop late-payment fees and put debt collection on hold, the group called for a halt to disconnections.

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Consumer NZ head of research, Jessica Wilson, says prompt-payment discounts are essentially a late-payment penalty in disguise.

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The five biggest power companies and two largest telcos are on board, confirming to Consumer NZ they won't penalise people experiencing outbreak-related hardship.

However, the onus is on customers to let their providers know if they need help.

Contact, Genesis, Mercury, Meridian and Trustpower have all waived late-payment fees, although Mercury and Contact require customers to get in touch before the payment due date.

Consumer NZ head of research Jessica Wilson said while waiving traditional late payment fees is a positive step, four of the five big power companies still offer plans with 'prompt-payment discounts'.

'They are essentially a late-payment penalty in disguise,' she said.

'If you don't pay by the due date, you lose that 10 or 15 per cent 'discount' which is then added to your bill.'

Most power companies and telcos have scrapped late payment fees and disconnections during the coronavirus outbreak.

Of the five big companies, only Meridian has dropped prompt-payment discounts and the remainder said customers could lose the discount if they did not pay by the due date.

All five major power companies have temporarily stopped sending debts to debt collectors and paused disconnections, although Contact's blanket halt to disconnections applied only while the country was at coronavirus alert level 4.

On Tuesday, a Contact spokeswoman said that would continue to be the case for the majority of its residential customers at level 3.

'The only rare exception is where it is a last resort for prepay customers who have not been in touch, despite numerous attempts at our end,' she said.

Tom Hartmann, managing editor of budget advice website Sorted, says people struggling to pay their bills should talk to their service providers.

'Our aim before disconnection is to help our customers maintain their credit rating, work with social agencies to help support them financially and continue supply of energy with our last resort being disconnection.'

The two largest telcos, Spark and Vodafone, are are also giving customers a break, waiving late payment fees for two and six months respectively.

Both have also temporarily suspended disconnections for non-payment but Spark will continue to send debts to debt collectors 'if all other avenues have been exhausted'.

However, social services groups say more could be done.

Soraiya Daud, spokeswoman for budgeting advisers' support organisation FinCap, said businesses providing an essential service need to be show compassion to customers financially affected by the pandemic.

'People may need bespoke solutions to help them navigate this situation and these companies need to be proactive in offering support,' she said.

'Obviously, there will be capacity issues for big companies trying to do that, but they need to look at who is really vulnerable and who may not be able to self-advocate.'

Sorted managing editor Tom Hartmann said the best thing for people who found themselves in financial difficulty to do was talk to their service providers.

'Although that may be an awkward conversation, most organisations, particularly in this situation, will be quick to give people alternatives,' he said.

'People need that short term flexibility if their income is interrupted, they need to give themselves some breathing room.'