ACCC Takes Action Against EnergyAustralia and Bright Choice Australia

Wednesday 26 November 2014 @ 12.39 p.m. | Trade & Commerce

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against EnergyAustralia Pty Ltd (EnergyAustralia) and its telemarketing company, Bright Choice Australia Pty Ltd (Bright Choice), for allegedly contravening the Australian Consumer Law (ACL) by making false or misleading representations and engaging in misleading or deceptive conduct when dealing with certain consumers to sell EnergyAustralia’s electricity and gas plans.

Background

In April 2014, EnergyAustralia agreed to pay a penalty of $1.2 million for unlawful door-to-door selling practices and consented to the declarations and other orders sought by the ACCC in that proceeding.

The ACCC also took action against Neighbourhood Energy, Australian Power & Gas Company, AGL and Origin Energy in respect of door-to-door marketing conduct in 2012 and 2013. Following the ACCC’s enforcement action against several energy retailers, a number of energy retail companies, including EnergyAustralia, ceased door-to-door marketing activities.

Allegations Made By The ACCC

The ACCC alleges that Bright Choice signed up a number of consumers residing in Victoria, NSW and Queensland to EnergyAustralia plans over the telephone without the consumer’s knowledge or consent, following representations by Bright Choice during these calls 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; and
  • EnergyAustralia and Bright Choice would not treat the consumer as if he or she had agreed to enter into an energy agreement unless the consumer subsequently contacted Energy Australia to accept the offer.

In fact, those consumers were recorded by Bright Choice as having agreed to enter into a contract and EnergyAustralia then sent each of these consumers a “Welcome Pack” containing contractual documents and treated each consumer as having agreed to switch energy services to a new EnergyAustralia plan. The ACCC alleges that the telemarketing and subsequent mail out of “Welcome Packs” involved false, misleading and deceptive representations, in contravention of the ACL.

ACCC Chairman Rod Sims said:

“Regardless of whether a salesperson is knocking on your door or calling you at home, the legal protections of the Australian Consumer Law apply … The ACCC’s message is clear – energy companies must act to ensure that their sales agents and representatives do not engage in unlawful sales tactics, whether they are selling door to door or telemarketing,” Mr Sims said.

Penalties Sought

The ACCC is seeking pecuniary penalties, declarations and costs against both EnergyAustralia and Bright Choice. The ACCC is also seeking an injunction and compliance program orders against Bright Choice.

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

The AER has instituted separate proceedings in the Federal Court against EnergyAustralia, alleging 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.

Both proceedings have been set down for a directions hearing in Melbourne on 13 February 2015.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

ACCC takes action against EnergyAustralia and Bright Choice Australia - ACCC Release MR 285/14

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