ACCC Starts Federal Court Action Against AGL SA: Alleged False or Misleading Representations
Friday 6 December 2013 @ 12.06 p.m. | Corporate & Regulatory | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC) has initiated Federal Court proceeding accusing AGL South Australia Pty Ltd (AGL SA) of misleading consumers about power contract discounts.
In a recently posted Media Release the ACCC has explained that the alleged conduct relates to representations made by AGL SA to residential electricity consumers in South Australia about the level of discounts taken off electricity usage charges that could be obtained by consumers under AGL SA’s energy plans.
The ACCC Chairman Rod Sims is quoted as saying that:
“AGL SA represented to consumers that if they entered into an energy plan, they would receive a specified discount off the charges they would otherwise pay AGL SA. However, AGL SA later increased the rates charged to consumers under energy plans and, despite representing that the discounts would continue, the level of discounts that consumers had signed up to was eroded,”
More specifically, the ACCC alleges that when AGL SA increased rates for energy usage charges under its energy plans in mid-2012 and mid-2013, AGL SA made false or misleading representations to consumers who had entered into an energy plan that they would continue to receive their discount or that there had been no change to the discount, when this in fact was not the case. In reality at least from the time of these rate increases, consumers with energy plans effectively received reduced discounts, and in some cases paid more for electricity than if they had been supplied by AGL SA under its standard retail contract.
As an example, the ACCC alleges that consumers who signed up to AGL SA’s "Freedom 3% plan" between January and June 2012 received 3% off their energy usage charges but following an increase in their rates in July 2012, these consumers were being charged energy usage rates that were approximately 4.6% higher than what they would have been charged under AGL SA’s standard retail contract. In effect consumer were left approximately 1.5% worse off than if they had been supplied under the standard retail contract.
Through its action in the Federal Court the ACCC is seeking pecuniary penalties, declarations, injunctions, publication orders, a compliance program, redress for affected consumers, and costs.
The ACCC Chairman Rod Sims is further quoted as saying that:
“Power bills are a significant, rolling cost for Australian households. Consumers are attracted to energy plans featuring discounts because of the opportunity they offer to reduce these costs, . . .Energy retailers are under particular scrutiny from the ACCC for conduct which misleads consumers, as consumer protection in this sector is an ACCC priority.”
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