‘Sorry’: Energy giant cops $14m fine
Written by admin on September 26, 2024
The Federal Court has whacked one of Australia’s “big three” energy retailers with a $14m fine for misleading customers over prices.
The court ordered EnergyAustralia, a major electricity and gas seller, to pay the penalty for making false, misleading or deceptive statements to hundreds of thousands of consumers about electricity prices and for failing to provide mandatory information required by the Electricity Retail Code.
The company has admitted to the breach, which occurred between June 20 and September 12, 2022 and affected some 566,000 customers.
The company failed to state the lowest possible price in its communications to customers and misrepresented the estimated annual price of its electricity offer for an “average” customer, the Australian Competition and Consumer Commission stated on Thursday.
EnergyAustralia has also admitted to publishing 27 electricity offers online that “failed to state the difference between the reference price and the unconditional price expressed as a percentage of the reference price, or the ‘lowest possible price’ as required under the Code”.
The misleading communications happened between July 1 and September 27, 2022 and were viewed about 220,000 times.
“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.
The Code applies to all retailers who supply electricity to residential and small businesses in applicable distribution regions in NSW, South Australia and Queensland, the ACCC said.
It establishes how retailer must communicate pricing information to customers and it was introduced to increase transparency in the retail electricity market.
AGL, Origin and EnergyAustralia dominate the retail market in Australia, selling gas and electricity to millions of customers.
EnergyAustralia has about 1.6 million customers across eastern Australia, the company’s website states, and it employs about 2300 people.
In a statement from Thursday, EnergyAustralia managing director Mark Collette said he and the company were “sincerely sorry” for the failure.
“We acknowledge this $14m penalty reflects the seriousness of the failure in our duty to provide clear and accurate information to customers,” he said.
“Once we became aware of the issue, we took immediate action.
“We sought to contact every customer impacted by this issue, as well as reviewed our pricing processes and customer communication.
“We have made significant improvements to our governance.
“We are continually investing in systems to uplift our customers’ experience.
“We are also working with our teams to ensure that we identify any issues and rectify them as quickly as possible.
“Our customers need the right information to manage their energy bills.
“We recognise that with the rising cost of living impacting everyone, we must get the right information to our customers.”
