The Australian Competition and Consumer Commission (ACCC) has launched an investigation into whether energy retailers are misleading consumers by promoting energy plans that claim to deliver “savings” or “value” but in reality may offer poor outcomes for households.

The move follows a designated complaint lodged by consumer group CHOICE – the first it has submitted under the new framework and only the second designated complaint the ACCC has received.

ACCC Deputy Chair Catriona Lowe said the watchdog is concerned that plan names and descriptions may deceive consumers and discourage them from switching to genuinely cheaper options.

“Energy plans that promote ‘savings’ or value may entice many consumers to a particular plan and influence their decision making,” Lowe said. “We are concerned that consumers may be misled or deceived by plan names or descriptions of plans that offer ‘savings’ that are not genuine.”

CHOICE also raised concerns about confusing practices such as energy retailers reusing identical plan names despite differences in rates, and “Better Offer” or “Best Offer” messages on bills referring customers to plans that may not actually be available to them.

These mandatory bill messages are designed to help consumers find cheaper deals but may instead add to the complexity of navigating the market.

The ACCC said it may take enforcement action if the investigation finds conduct that breaches Australian Consumer Law. It could also issue industry guidance or contribute to policy and law reform.

Recent changes by the Australian Energy Regulator (AER) already require retailers that reuse plan names to provide clearer information on bills.

The ACCC confirmed it will continue working with the AER and the Victorian Essential Services Commission on upcoming reviews to address issues raised in CHOICE’s complaint.

“The upcoming reviews will provide the opportunity to consider some of the issues raised by CHOICE while reflecting on the broader issues facing consumers in the energy market,” Lowe said.