Court orders Sumo to pay $10M penalties for unlawful doorknocking and best offer messaging failures

The Supreme Court of Victoria has ordered energy retailers Sumo Power Pty Ltd and Sumo Gas Pty Ltd (together, Sumo) to pay penalties totalling $10 million for unlawful door-to-door marketing and failures related to its best offer messaging.

This outcome represents the largest penalty ever imposed for breaches of Victoria’s energy laws and codes of practice. 

In a statement of agreed facts submitted to the Court with the commission, Sumo admitted, and the Court found it had: 

• Engaged in prohibited door-to-door marketing over seven months in 2022, affecting 5,941 Victorian energy consumers. 
• Signed up two customers to Sumo energy contracts when those customers had not given their explicit informed consent.
• Not met its obligations in relation to best offer messaging in 2022 and 2023, affecting more than 60,000 Victorian energy customer accounts.

Essential Services Commission Chairperson Gerard Brody said that while Sumo has committed to change its practices, the significant penalties and other remedies imposed by the Supreme Court of Victoria were an appropriate response to its conduct.

“Victoria has banned high-pressure door-to-door sales by energy retailers, protecting consumers from aggressive sales tactics. Strict rules mandating clear 'best offer' messages are designed to help Victorians save money. With cost-of-living pressures continuing to affect so many, compliance with these laws is not optional—it’s essential.” 

The Court imposed significant penalties and made orders requiring Sumo to:

• Pay $10 million in pecuniary penalties and $200,000 of the commission’s legal costs.
• Not engage in any door-to-door marketing of energy products or services for three years, even with customer consent.
• Publish public notices in The Age and Herald Sun newspapers and on its website about the outcome of the proceedings and consumer rights under Victoria’s energy laws.
• Set up and maintain for a period of three years a ‘best offer messaging’ quality assurance process.

In handing down the judgment, Justice Osbourne noted that, “[t]he penalty should be sufficient to incentivise Sumo and other retailers to invest in the necessary IT and compliance infrastructure to avoid future contraventions; however, it is also relevant to take into account the material improvements made by Sumo to its compliance systems generally and specifically with respect to IT systems and best offer messages.”

The commission has also accepted a court enforceable undertaking from Sumo that was agreed in July 2024, requiring Sumo to:

• Pay $800,000 to the Consumer Action Law Centre in Victoria to fund a three-year consumer education campaign about consumer rights under Victoria’s energy laws.
• Set up and maintain for a period of five years a new compliance management system consistent with relevant Australian Standards in respect of Victoria’s energy laws. 

Commissioner Brody continued, “by filing proceedings in the Supreme Court of Victoria for the first time, the commission sent a strong message to all energy businesses that we will use the full range of available enforcement options to hold energy businesses to account for breaches of Victoria’s energy laws. 

“I welcome the Court’s decision to order these substantial penalties and remedies against Sumo. Alongside the enforceable undertaking the commission has accepted, I trust this outcome serves to deter both Sumo and other energy retailers from engaging in similar conduct in the future.”

Door-to-door marketing

The Electricity Industry Act 2000 and the Gas Industry Act 2001 prohibits electricity and gas retail licensees (or their agents) from calling on a domestic customer at their home to negotiate an electricity or gas contract, unless the customer has given express consent to be contacted at their home for that purpose. This is also known as door-to-door marketing.

Best offer messaging

Victorian energy retailers are required to tell customers on their bill whether or not they are receiving their deemed best offer—at least once every 3 months for electricity and at least once every 4 months for gas. This includes telling customers how much money they could save by switching to the best plan the retailer offers, if they are not already on it.