ACCC claims EnergyAustralia misled consumers amid cost of living crisis

Energy relief has arrived, but the ACCC warns it could be short-lived.

Energy relief has arrived, but the ACCC warns it could be short-lived. Photo: TND

One of Australia’s largest electricity retailers has been dragged to federal court by the consumer watchdog over claims it misled consumers about price hikes during the cost-of-living crisis.

The Australian Competition and Consumer Commission (ACCC) alleged on Friday that EnergyAustralia failed to tell customers about its cheapest deals when notifying them of impending price changes – which were in some cases in excess of 25 per cent – during 2022.

ACCC chair Gina Cass-Gottlieb said that’s a breach of a binding code of conduct signed by big energy retailers, which has been in place for more than four years now and requires price information to be presented in a simple and standardised way.

“There really is no excuse,” Ms Cass-Gottlieb said on Friday.

“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 also 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.”

The regulator will claim in federal court that between June and September 2022 EnergyAustralia didn’t inform customers about their “lowest possible price” – an estimate of the amount a customer would be charged in a year based on typical usage and relevant discounting.

It is also alleged that EnergyAustralia breached Consumer Law by making false or misleading representations to consumers about their projected annual costs after its 2022 price changes.

Ms Cass-Gottlieb said compliance with the energy code is vital in allowing consumers to make informed decisions about their energy bills.

“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,” she said.

“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.”

EnergyAustralia is one of the three largest electricity retailers in the nation, with around one million households in its customer base (a 15 per cnt market share). and about 88,000 small businesses.

It was one of a number of large companies that has passed through major energy bill hikes over the past two years, exacerbating the cost of living crisis facing millions of Australian families.

Households have been encouraged to shop around to find cheaper deals in the face of such high prices, but the ACCC’s allegations on Friday go to the heart of a consumer’s ability to do that.

“It has now been more than four years since the Code was introduced, so there is really no excuse for retailers who do not have adequate programs in place to ensure they comply with their obligations under the Code,” Ms Cass-Gottlieb said.

EnergyAustralia published a statement on Friday afternoon about the case, with chief customer officer Mark Brownfield apologising for the conduct.

“We understand the clarity of our customer communications is particularly important at a time of cost of living pressures,” he said.

“We have been open with the ACCC on the issues they identified.”

“We have already prioritised the completion of our program of improvements to customer communications.”

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