Energy retail giant EnergyAustralia has been ordered to pay a $14 million (US$9.6 million) penalty for making false and misleading statements to over half a million customers.
The company admitted that in communications with 566,000 customers between June 20 and Sept. 12, 2022, it failed to mention the lowest possible price for new electricity offers.
It further conceded that 27 offers published online between July 1, and Sept. 27, 2022, did not state the difference between the reference price and the lowest possible price, which is required under the Electricity Retail Code.
Under the Code, electricity distributors in New South Wales, South Australia, and Southeast Queensland are required to disclose the reference price (a government-set benchmark price) and the lowest possible price (assuming all conditions for discounts are met) for transparency reasons.
The consumer watchdog, the Australian Competition and Consumer Commission (ACCC) brought the charges against the retailer in September 2023.
“EnergyAustralia breached laws which were designed to help consumers to compare electricity offers and identify the best deal by increasing transparency,” ACCC Chair Gina Cass-Gottlieb said.
“EnergyAustralia’s failure to fully inform consumers meant they could not accurately compare offers from competing retailers and may have been denied the opportunity to choose the best deal for them.”
In 2022, many Australian households saw sudden spikes in their electricity bills and attempted to shop around for better deals.
“Some consumers may also have been misled by EnergyAustralia’s statements into thinking that a price change was less than it actually was, causing them to stay with their existing plan when, in fact, a different plan may have represented a better deal,” Cass-Gottlieb said.
EnergyAustralia Managing Director Mark Collette said once they had become aware of the issue, they attempted to contact every customer that had been impacted and made significant improvements to the company’s governance.
“We acknowledge this $14 million penalty reflects the seriousness of the failure in our duty to provide clear and accurate information to customers. We are sincerely sorry,” he said.
“We recognise that with the rising cost of living impacting everyone, we must get the right information to our customers.”
EnergyAustralia is one of the “big three” electricity retailers in the country, alongside AGL and Origin.
In 2022, it had around one million customers or 15 percent of the market share.
In previous successful court actions by ACCC against the retail giant, EnergyAustralia was ordered to pay fines of $1.2 million and $1 million. Both instances were due to making misleading statements and deceptive conduct.
The company was previously owned by the NSW government but was acquired by Hong Kong energy company CLP in 2011.
