EnergyAustralia has been ordered by the Federal Court to pay $14 million in penalties for making false, misleading, or deceptive statements about electricity prices, affecting hundreds of thousands of consumers, including Wyndham City residents who may have been impacted. The company failed to provide mandatory information as required by the Electricity Retail Code (the Code), leaving many consumers misinformed during a crucial period of rising electricity prices.
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Between 20 June and 12 September 2022, EnergyAustralia admitted to breaching Australian Consumer Law and the Code by not stating the lowest possible price in communications sent to approximately 566,000 consumers. The company also misrepresented the estimated annual price for an “average” customer in its offers. For residents of Wyndham City and beyond, this could have meant staying on higher-cost plans unknowingly.
EnergyAustralia further admitted that from 1 July to 27 September 2022, it published 27 electricity offers online that did not include the required information on the difference between the reference price and the unconditional price, or the ‘lowest possible price.’ These offers 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,” said ACCC Chair Gina Cass-Gottlieb.
Ms Cass-Gottlieb added, “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.”
This lapse occurred when consumers, including many in Wyndham City, were eager to switch to cheaper plans amidst rising electricity costs. Some may have been misled into thinking a price change was smaller than it actually was, causing them to stick with their existing plans, despite potentially better deals elsewhere.
Mark Collette, Managing Director of EnergyAustralia, addressed the penalties, stating: “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.
“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.”
“It is essential that electricity retailers provide consumers with accurate information so they can compare and access the most competitive prices in the market. This enforcement action is a reminder that the ACCC is closely monitoring the electricity market, conducting regular compliance checks and ready to take strong action when appropriate,” Ms Cass-Gottlieb stated.
The Court also ordered EnergyAustralia to review its compliance program and contribute to the ACCC’s costs. This is not the first time EnergyAustralia has faced penalties. In April 2014 and March 2015, the company was fined for similar deceptive conduct involving misleading representations to consumers.
Wyndham City residents, like others, rely on transparency to make informed decisions about electricity plans, and this case underscores the importance of retailers adhering to the law.
