Alinta Energy will compensate thousands of customers for making allegedly misleading electricity price comparisons with competitors, according to the consumer watchdog.

The Australian electricity company compared increases in its competitors’ standing rates (also known as undiscounted rates) to decreases in Alinta’s discounted rates.

The Australian Competition and Consumer Commission alleged the unfair comparisons that appeared in advertisements between December 9, 2017 and February 28, 2018, were likely in breach of consumer law.

The ACCC claimed the advertisements were “misleading” because they gave consumers a false impression of Alinta’s electricity price reduction – its standing tariff rates were 1.8 per cent, not 2.8 per cent as advertised.

In response to the ACCC’s investigation, Alinta acknowledged the concerns and immediately ceased the advertising campaign, agreeing to compensate affected customers.

“Alinta’s conduct prevented customers from making informed choices about which electricity retailer best suited their needs,” ACCC acting chair Delia Rickard said.

“Businesses must not mislead consumers in advertisements comparing their prices or services to those offered by competitors.

“Following ACCC action, Alinta will contact all affected Victorian customers to advise that they will honour the advertised price reduction for customers who wish to continue with their plan.”

Alinta’s commitment to honour the 2.8 per cent tariff price reduction will be provided through credits backdated from January 12, 2018, to July 11, 2018.

Adjusted rates will apply from July 12, 2018, over a period of six months.

According to the ACCC, Alinta is going to review its advertising processes and provide relevant staff ‘refresher training’ in the Australian Consumer Law.

The credits will be automatically applied for affected customers but anyone with concerns is advised to contact Alinta on 133 702.

Alinta Energy told The New Daily it blamed “an error” which occurred when an average tariff reduction figure was reviewed and found to be one per cent lower than the 2.8 per cent average reduction that was advertised.

“We apologise to those customers who were affected,” Jim Galvin, Alinta executive director of retail markets, said.

“We remain absolutely committed to making energy more affordable for you, and recognise our communication should have been clearer and error-free.”