The consumer watchdog is taking legal action against Click Energy for allegedly misleading customers over how much they could save through conditional discounts.
The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Amaysim Energy Pty Ltd (trading as Click Energy), alleging that it made false or misleading marketing claims about discounts and savings that Victorian and Queensland customers could obtain, in breach of the Australian Consumer Law.
ACCC Chair Rod Sims has described the alleged conduct as “among the worst practices we see in retail electricity marketing”.
From around October 2017 to March 2018, the ACCC says that Click Energy represented to consumers in Victoria and Queensland that under its market energy offers, they could get discounts of between 7 and 29 per cent off Click Energy’s energy charges if they paid their bills on time.
The ACCC says that the representations were false or misleading because the discounts offered applied to Click Energy’s market contract rates, which varied and were higher than Click Energy’s standing offer rates.
“When compared with Click Energy’s standing offer rates, the discounts were much lower than advertised. In some cases, there was no discount at all,” ACCC Chair Rod Sims said.
Click Energy also represented that consumers would save an estimated amount if they switched, which the ACCC alleges is false or misleading because they had no proper basis for these representations.
“The advertised savings were based on the amount a consumer could save with Click Energy by paying on time, and not on any estimate of savings a consumer switching from another retailer would obtain,” Mr Sims said.
“We believe that Click Energy’s conduct is among the worst practices we see in retail electricity marketing. We allege that consumers were misled about discounts and savings, with some consumers not getting any discount or savings at all.
“The retail electricity market is too complex and opaque. Customers need to trust that discounts and savings advertised by retailers are accurate so they can make informed choices about which products are best for them.”
Best-known as a phone and internet service provider, Amaysim acquired Click Energy in early 2017 before launching its own electricity and gas retail brand called Amaysim Energy. The two retailers continue to operate as separate brands.
A spokesperson for Click Energy told Canstar Blue that the company has “worked cooperatively” with the ACCC throughout its investigation and considers its decision to commence proceedings a disproportionate response.
“Click Energy takes its obligations under Australian Consumer Law seriously and has appropriate processes in place to ensure compliance. The company rejects the claims being made by the ACCC and believes it has acted lawfully, ethically and in accordance with industry practice,” the spokesperson said in a statement.
“The ACCC’s allegations relate to legacy Click Energy products which are no longer offered to the public.”
Click Energy says it has reviewed and improved its statements regarding discounts and savings, and that all of its discounted products are now based off the relevant standing offer.
The ACCC is seeking pecuniary penalties, declarations, injunctions, publication orders, costs and an order allowing affected customers to exit their plans without penalty.
The difference between standing and market offer prices
The amount electricity customers pay can vary hugely depending on whether they are on a standard or market contract. Standard contracts almost always work out more expensive than market contracts, especially if the market offer includes a conditional discount.
In most cases, retailers apply their conditional discounts to standard prices.
Based on a five-person household living on the Citipower distribution network in Melbourne, Canstar Blue’s electricity database shows that the difference between the cheapest market offers – with discounts applied – and the most expensive standing offers is more than $2,000 a year.
Households are likely to be on a standard contract if they have never switched energy retailers or negotiated a new deal in recent years. Customers may also be paying standard prices if their market offer has expired and they no longer receive a discount.