ACCC v EnergyAustralia Pty Ltd [2015] FCA 274: EnergyAustralia Fined $1.1m for Misleading Consumers
Tuesday 7 April 2015 @ 9.51 a.m. | Legal Research | Trade & Commerce
In the case of Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2015] FCA 274 (27 March 2015), the Federal Court of Australia has ordered that EnergyAustralia Pty Ltd (EnergyAustralia) pay penalties of $1 million and that its former telemarketing company, Bright Choice Australia Pty Ltd (Bright Choice), pay penalties of $100,000 for contravening sections 18 and 29 of the Australian Consumer Law (ACL) [Sch 2 to the Competition and Consumer Act 2010 (Cth)].
The Court also declared that EnergyAustralia and Bright Choice 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.
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.
Between August 2012 and April 2013, Bright Choice representatives, acting as agents of EnergyAustralia, telephoned consumers residing in Victoria, NSW and Queensland for the purpose of marketing EnergyAustralia electricity and gas plans.
During those calls, Bright Choice stated that they were calling on behalf of EnergyAustralia, or on behalf of Telechoice which had “partnered” with EnergyAustralia, and represented 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, without further communication with the consumer, treat the consumer as if they had agreed to enter into a new plan for the supply of electricity and/or gas with EnergyAustralia.
In fact, those consumers were recorded by Bright Choice as having agreed to enter into a contract and EnergyAustralia then sent each of them a “Welcome Pack” containing contractual documents and treated each consumer as having agreed to switch energy services to a new EnergyAustralia plan.
Reaction from the ACCC
The ACCC Chairman Rod Sims said:
“This decision demonstrates that companies cannot avoid their obligations under the Australian Consumer Law by engaging sales agents … 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.”
Court Action
The Court imposed an injunction prohibiting Bright Choice from engaging in similar conduct for 5 years and ordered Bright Choice to establish and maintain an ACL compliance program for a period of 3 years. The Court also ordered EnergyAustralia and Bright Choice pay a contribution to the ACCC’s costs.
EnergyAustralia and Bright Choice co-operated 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 ACCC’s enforcement action followed an investigation undertaken by the ACCC in co-ordination with the Australian Energy Regulator (AER) into telemarketing practices by EnergyAustralia and Bright Choice.
In separate concurrent proceedings brought by the AER against EnergyAustralia, the Court found 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, and imposed penalties of $500,000 on EnergyAustralia.
More information for consumers is available on the ACCC website.
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Sources:
EnergyAustralia and telemarketer ordered to pay penalties totalling $1.1 million for misleading consumers – ACCC Release MR 44/15
Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2015] FCA 274 (27 March 2015)
