EnergyAustralia is in hot water with the consumer watchdog, after the retailer allegedly gave misleading electricity prices to households and small businesses during last year’s market crisis.
The Australian Competition and Consumer Commission (ACCC) has taken EnergyAustralia to court over alleged breaches of the Electricity Retail Code and the Australian Consumer Law in 2022, claiming that the retailer misled its customers when sending price change notices.
The ACCC claims that between June 20 and September 28, 2022, EnergyAustralia failed to provide the lowest possible price to customers when it issued price change notices during this time.
The lowest possible price is a mandatory pricing estimate as part of the electricity code, which shows customers how much they may be charged annually, based on usage assumptions and discount conditions being met.
ACCC Chair Gina Cass-Gottlieb said the watchdog believed these actions may have made it more difficult for customers to compare electricity offers.
“With electricity prices increasing, and many Australians looking for a better deal, it’s crucial that the information people receive from their energy company is correct and can be relied upon,” she said.
“We have commenced this court action because we allege that EnergyAustralia’s conduct made it harder for people to accurately compare their electricity plan with offers from other retailers.”
Additionally, the ACCC claims that EnergyAustralia made false or misleading representations of its estimated annual costs for customers on these same notices.
Over the same time period it was alleged that EnergyAustralia failed to state the percentage difference to the reference price – a benchmark price set by the government. This is a requirement of all retailers in order to help consumers make informed switching decisions.
The ACCC alleges that this missing percentage difference affected all 27 of the published electricity offers advertised on EnergyAustralia’s website during June and September 2022, in addition to price change notices and other communications.
Ms Cass-Gottlieb said without these requirements, consumers would struggle to compare offers like for like.
“Households cannot do genuine like-for-like comparisons between different electricity plans unless every energy company complies with the Code requirements on price offers. Non-compliance, particularly by a large company, can distort the process of shopping around for the best deal.”
The ACCC claims it identified EnergyAustralia’s conduct through an audit of the retailer’s compliance to the Electricity Retail Code.
Similar ACCC proceedings were also undertaken earlier this year into CovaU and ReAmped Energy.
EnergyAustralia is one of the country’s largest electricity providers and is responsible for servicing about one million residential customers and 88,000 small business customers.
EnergyAustralia Chief Customer Officer Mark Brownfield has since apologised to EnergyAustralia’s customers for these errors and affirmed that the retailer is working to improve its customer communications.
“On behalf of EnergyAustralia, I apologise to our customers,” he said. “We understand the clarity of our customer communication is particularly important at a time when cost of living pressures are a key concern for Australian households.
“We have been open with the ACCC on the issues they identified and the importance we attach to clear, transparent communications to our customers. We want to confirm the fundamental importance EnergyAustralia attaches to regulatory compliance in every aspect of our operations. We have already prioritised the completion of our program of improvements to customer communications to ensure our customers have the information they need to make informed decisions.”
The ACCC is now seeking penalties and declarations, costs, and other orders.