ACCC Takes Action Against Origin for Alleged False or Misleading Representations
Tuesday 20 May 2014 @ 8.36 a.m. | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court of Australia against Origin Energy Limited (Origin) alleging that Origin made false or misleading representations and engaged in misleading or deceptive conduct.
The allegations relate to representations made by Origin to residential consumers of electricity and/or natural gas in South Australia about the level of discounts off energy usage charges that could be obtained under Origin’s DailySaver energy plans.
The ACCC alleges that Origin represented to consumers in early to mid-2013, on its website and in confirmation packs it sent to consumers, that under a DailySaver energy plan they would receive a discount off the energy usage charges they would otherwise pay Origin.
The ACCC alleges that Origin represented to consumers that they would receive:
- a discount of up to 16 percent off the electricity usage charges they would otherwise pay Origin, when in fact the rates charged to consumers under a DailySaver plan were approximately 4 per cent higher than under Origin’s standard retail contract; and
- a discount of up to 12 percent off the natural gas usage charges they would otherwise pay Origin, when in fact the rates charged to consumers under a DailySaver plan were approximately 1 per cent higher than under Origin’s standard retail contract.
The ACCC Chairman, Rod Sims said:
“The ACCC alleges that, from day one, consumers on a DailySaver energy plan were short-changed on their discount … Power bills are one of the most significant continuing costs for households. As a result, representations by energy retailers about savings that can be achieved through discounted charges are likely to induce consumers to agree to commence an energy plan because of the opportunity to lower their power bills … This is the second proceeding commenced by the ACCC against an energy retailer in which it is alleged that the retailer has misled consumers about the level of discounts under energy plans featuring discounts. Energy retailers should be in no doubt that the ACCC will take appropriate enforcement action when it forms the view that a retailer has misled consumers about the savings they can obtain under energy plans.”
The ACCC is seeking pecuniary penalties, declarations, injunctions, publication orders, a compliance program, redress for affected consumers, and costs.
In the ACCC Compliance and Enforcement Priorities for 2014, the ACCC announced its priority in dealing with consumer protection in the energy sector with a particular focus on savings representations, also referred to as “discounts off what?”
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Sources:
ACCC Release NR 108/14
