EnergyAustralia penalised $1million for misleading consumers

The Federal Court of Australia has ordered that EnergyAustralia pay penalties of $1 million and that its former telemarketing company, Bright Choice, pay penalties of $100,000 for contravening the Australian Consumer Law (ACL).

5472281806_2aeb1fa280_zThe Court also declared that EnergyAustralia and Bright Choice had made false or misleading representations and engaged in misleading or deceptive conduct when dealing with certain consumers to sell EnergyAustralia’s electricity and gas plans.

Between August 2012 and April 2013, Bright Choice representatives, acting as agents of EnergyAustralia, telephoned consumers residing in Victoria, New South Wales, and Queensland for the purpose of marketing EnergyAustralia electricity and gas plans.

During those calls, Bright Choice stated that they were calling on behalf of EnergyAustralia, or on behalf of Telechoice which had “partnered” with EnergyAustralia, and represented that:

  • the consumers were not being signed up to an energy agreement
  • the consumers would be sent information, following which they could decide whether or not to sign up to an energy agreement
  • EnergyAustralia and Bright Choice would not, without further communication with the consumer, treat the consumer as if they had agreed to enter into a new plan for the supply of electricity and/or gas with EnergyAustralia.

In fact, those consumers were recorded by Bright Choice as having agreed to enter into a contract and EnergyAustralia then sent each of them a “Welcome Pack” containing contractual documents and treated each consumer as having agreed to switch energy services to a new EnergyAustralia plan.

“This decision demonstrates that companies cannot avoid their obligations under the Australian Consumer Law by engaging sales agents,” ACCC Chairman Rod Sims said.

“The Court has now ordered significant penalties against some of Australia’s largest energy retailers for misleading sales tactics. However, the ACCC will continue to monitor the energy sector. Whether selling door-to-door or telemarketing, the ACCC will take action to ensure compliance with the Australian Consumer Law,” Mr Sims said.

The Court imposed an injunction  prohibiting Bright Choice from engaging in similar conduct for 5 years and ordered Bright Choice to establish and maintain an ACL compliance program for a period of 3 years. The Court also ordered EnergyAustralia and Bright Choice pay a contribution to the ACCC’s costs.

EnergyAustralia and Bright Choice cooperated with the ACCC by agreeing to joint submissions on penalties and a statement of agreed facts filed with the Court, and consenting to the other orders made by the Court against them.

The ACCC’s enforcement action followed an investigation undertaken by the ACCC in coordination with the Australian Energy Regulator (AER) into telemarketing practices by EnergyAustralia and Bright Choice.

In separate concurrent proceedings brought by the AER against EnergyAustralia, the Court found that EnergyAustralia failed to obtain explicit informed consent before transferring or entering into a new energy contract with certain customers in South Australia and the Australian Capital Territory, in breach of the National Energy Retail Law, and imposed penalties of $500,000 on EnergyAustralia.

Guidance for consumers

Consumers should be aware of their rights in relation to telemarketing calls:

  • If you receive a call from a salesperson, you can hang up.
  • Before you say yes to anything, ask questions about what you are agreeing to.
  • If you receive something after the phone call you did not agree to, act straight away by contacting the company, correcting the position and, if necessary, making a complaint to the ACCC or your state or territory fair trading office.
  • Remember: it’s OK to say no and it’s OK to change your mind during any cooling off period.
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