The Australian Competition and Consumer Commission (ACCC) has filed court proceedings against EnergyAustralia, the country’s third-largest energy retailer, for allegedly failing to inform customers of impending price changes and for allegedly making false representations in annual cost estimates stated on the notices.
The consumer watchdog launched legal action at the Federal Court for EnergyAustralia’s alleged violation of the Electricity Retail Code between June 2022 and September 2022. The ACCC said that the energy provider did not state the “lowest possible price” when sending price change notices to its consumers.
“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,” ACCC Chair Gina Cass-Gottlieb 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.”
In addition, the ACCC alleges that EnergyAustralia violated the Australian Consumer Law by failing to state the lowest possible price and the percentage difference to the reference price set by the government between July 2022 and September 2022 when the company published advertised 27 electricity price offers on its website.
The lowest possible price is a mandatory estimate of the amount a representative customer would be charged in a year, based on model usage and assuming the conditions attached to any discounts will be met.
The law requires retailers to state the difference between their offer and the benchmark price in their communication to consumers to allow the latter to compare price offers from different energy providers.
“Correspondence from energy companies often contains complex information that is hard for consumers to decipher, which is precisely the problem that the Electricity Retail Code was introduced to deal with,” the ACCC chair said.
EnergyAustralia Apologises
Ms. Cass-Gottlieb noted that retailers do not have any valid excuse for breaching the rules as the code took effectivity more than four years ago.The ACCC said it is seeking penalties and declarations, costs, and other orders.
Meanwhile, EnergyAustralia expressed its apologies in a media statement, noting the importance of proper communication to its customers.
“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,” EnergyAustralia chief customer officer Mark Brownfield said.
“On behalf of EnergyAustralia, I apologise to our customers.
“We have been open with the ACCC on the issues that they have identified and the importance we attach to clear, transparent communications to our customers.”
EnergyAustralia has about one million residential customers and 88,000 small business owners as of the first quarter of 2022-23. The company ranks third next to AGL Energy and Origin Energy in terms of size, as it takes 15.1 percent of market share for residential customers and 13.6 percent market share for commercial customers.
