Bait and switch power price discounts costs Victorian families $500 on electricity bill

Victorian families are being tricked by “bait and switch” power price discounts, a detailed analysis of 600 power bills has found.

Families are being tricked by “bait and switch” power price discounts that are not based on where they live, and households on default offers are paying at least $500 more than they should.

A new energy deal comparison site that uses artificial intelligence to find savings for households and businesses has revealed the ripoffs following a detailed analysis of more than 600 verified Victorian bills.

The analysis by Saive, which is a paid subscription service that regularly monitors its customer’s electricity use to match it against every published power deal, found that a whopping 95 per cent of customers were not on the best available to them.

It also found that some households were not told about better offers from their own retailer, which is a legal requirement, and that confusion was a roadblock to hip pocket relief.

Households on Victorian default offers are often paying too much. Picture: Supplied

Graeme Woodlands, managing director and co-founder of Saive, said individual data uploaded to its platform that uses “bank-level security”, runs calculations on every single offer available to rank them by cost as well as other factors customers choose.

“Our goal is to enable every Australian to find and stay on their best energy deal,” he said.

“It’s personalised to your property, and it’s vigilant on your behalf.”

The Victorian Government has an energy comparison website, which takes annual bills to work out better deals in the market.

Smart metre data can also be uploaded directly to the site, but energy experts say this takes time and knowledge of how the market works.

The Saive analysis of Victorian bills shows the pitfalls in the Victorian Default Offer, which is supposed to be a fallback option.

Families are being tricked by ‘bait and switch’ power price discounts. Picture: Supplied

It found that for those using between 2500 and 5000kWh a year, the VDO is about $220 above what those on competitive offers were paying – but that further savings of about $300 were available by sifting through other deals based on a household’s personal profile.

Those results are similar to those exposed in St Vincent de Paul Society’s tariff tracking project, which shows typical consumption households can save between $480 and $655 by switching to the best market offer – depending on network areas.

Mr Woodlands said the fact there were five network areas in Victoria meant default offers could vary by a whopping 32 per cent based on location, but that retailers advertised offers pegged against the cheapest location.

He said this encourages “bait and switch” tactics – spruiking offers that may not be relevant to individuals.

The Saive analysis shows solar and battery owners are the furthest from achieving best available offers, despite making that capital investment to reduce energy costs.

This often occurs when households chase higher feed-in rates in exchange for higher consumption rates, which don’t match their individual energy use – which AI can identify.

Originally published as Bait and switch power price discounts costs Victorian families $500 on electricity bill