As a carer for her husband, Adelaide pensioner Marianne Hunn spends a lot of time at home and a lot of money on electricity bills.
- Consumer organisations are calling for changes to buy now, pay later finance for domestic solar
- Customers say companies are using high-pressure tactics to sell solar power
- One company says a new consumer code will make it difficult for them to provide 0 per cent interest finance
So when a solar panel salesman phoned her in 2018 she thought her energy woes might finally be over.
“It sounded good initially because it was interest free and all it involved was the payment of the panels over five years,” she told 7.30.
Ms Hunn signed up for buy now, pay later finance.
‘A bit of a struggle’
After the panels were installed by Sun Energy, Ms Hunn began to feel the impact paying the instalments had on her household budget.
“It’s five kilowatts and I think it’s 16 panels and it cost $9,000,” she said.
“That’s quite a lot over five years.
“When the bill comes in for the panels and you’re still paying your electricity, it hits home that you’re paying a substantial amount combined.”
With all the other regular bills, Ms Hunn’s expenses started to add up.
“You’ve got things like your car registration, the petrol, servicing of the car, insurance for the car, the house, so it’s a lot of juggling,” she said.
“I have given advice to my friends that are on the pension not to commit themselves because it is a bit of a struggle.”
Buy now, pay later financing unregulated
Consumer Action Law Centre CEO Gerard Brody said Ms Hunn was not alone and he had heard many similar stories of financial hardship due to solar finance deals.
“Unsolicited selling means that people feel like they can’t say no,” he said.
“Like Marianne says, they’re worn down, they’re taken advantage of.
“Buy now, pay later finance is unregulated, it’s not treated the same way as other forms of consumer credit under our laws.
“Mortgages, personal loans, even credit cards are regulated to a certain standard.
“Regulated lenders are required to lend responsibly. That means they’re required to make an assessment whether a particular loan meets the customer’s needs, and repayments aren’t going to cause that customer substantial hardship.
“Unfortunately buy now, pay later providers aren’t required to make that assessment.”
‘We do not tolerate those types of selling practices’
Flexigroup, which is one of the largest buy now, pay later operators in the solar business, funded Ms Hunn’s panels.
It said it made a courtesy call to check in with Ms Hunn after her purchase but its call was not answered.
CEO Rebecca James said Ms Hunn should not have felt under any pressure to sign up for solar.
7.30 sent Sun Energy questions last Thursday.
Sun Energy said it complied with consumer laws and if a customer elected to use buy now, pay later finance, the company referred their application to Flexigroup for approval or rejection.
Last year the Australian Competition and Consumer Commission (ACCC) approved a new energy technology consumer code to set minimum standards of customer protection across initial marketing and promotion, through to contracts, finance and payments as well as installation, warranties and complaints-handling processes.
But Ms James said the changes would restrict Flexigroup’s ability to offer 0 per cent interest finance, which would ultimately make solar panels more expensive for customers.
The company is appealing against the changes before the Australian Competition Tribunal.
“We have financed over 180,000 Australian families in their quest to switch to green energy,” Ms James said.
“The evidence of financial hardship across all of our buy now, pay later products is less than 1 per cent, which is lower than many other financial services products.
“The level of complaints is incredibly low, as well.
“I think if we’ve seen anything from the [banking] royal commission, it’s clear that just enhanced regulation does not necessarily lead to better consumer outcomes.”
Mr Brody questioned Flexigroup’s motivations for the appeal.
“They’re seeing strong revenue from this business model and they are opposing any moves or regulatory changes that might affect them,” he said.
‘I think I was extremely ripped off’
In 2018, Chris Pascoe was doorknocked by an Aus Solar Co sales representative.
He signed up for an 8.6 kilowatt system for $16,000 through buy now, pay later finance.
“The sales guy was very slick,” Mr Pascoe said.
“I think I was extremely ripped off.”
After the installation, Mr Pascoe said the system could not be connected to the grid for months because of a missing piece of equipment.
He eventually received $2,000 compensation from Aus Solar Co.
“Once my panels were on my roof I didn’t hear from them again,” he said.
“The experience, it probably took a whole year of my life just trying to get our panels switched on properly.”
It also said its prices were in line with industry standards.
Aus Solar Co acknowledged there were some delays to Mr Pascoe’s connection to the grid, which fell below the company’s usual standards, so a reimbursement was offered.
‘Hang up, close the door’ on cold callers
Mr Brody said the new standards were key to better protecting customers.
“If this appeal [by Flexigroup] to the tribunal is upheld and there isn’t significant change in standards in the solar sector, I think what that means is we actually need legislation, we need law reform,” he said.
“I would encourage anyone just to hang up the phone to a cold caller, to close the door to anyone who visits their house.
“Do your own research.”
Ms James said Flexigroup would take action against solar retailers doing the wrong thing.
“In the last two years we’ve terminated agreements with 20 solar sellers that we didn’t believe were meeting the standards that we think need to be put in place to provide adequate consumer protection,” she said.
The Australian Competition Tribunal is expected to rule on Flexigroup’s appeal soon.