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EnergyAustralia And Bright Choice Hit With Penalties For Misleading Consumers

EnergyAustralia And Bright Choice Hit With Penalties For Misleading ConsumersThe Australian Competition and Consumer Commission (ACCC) today advised the court had found the two 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”.

EnergyAustralia has been hit with a $1 million penalty and Bright Choice $100,000 for contravening the Australian Consumer Law (ACL).

Between August 2012 and April 2013, consumers were told during calls by Bright Choice, acting on behalf of EnergyAustralia, that they were not being signed up to an energy agreement, however were recorded by Bright Choice as having agreed to enter into a contract, the ACCC stated.

EnergyAustralia subsequently sent the consumers, residing in Victoria, New South Wales and Queensland, a “Welcome Pack” containing contractual documents, treating “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,” commented ACCC chairman Rod Sims. 

“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.”

The court imposed an injunction prohibiting Bright Choice from engaging in similar conduct for five years, with Bright Choice ordered to establish and maintain an ACL compliance program for a period of three years.

EnergyAustralia and Bright Choice were also ordered to pay a contribution to the ACCC’s costs.

The ACCC’s enforcement action followed an investigation carried out in coordination with the Australian Energy Regulator (AER), with EnergyAustralia and Bright Choice cooperating 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 court found in separate concurrent proceedings brought by the AER against EnergyAustralia 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, imposing penalties of $500,000.