What do you call a discount when it's calculated from higher rates than the standard offering for consumers?
Misleading, according to the Federal Court which has today ordered penalties of $900,000 against Amaysim Energy - trading as Click Energy - for doing just that.
Between October 2017 and March 2018, Click Energy told consumers in Victoria and South East Queensland they could get discounts of between 7 and 29 per cent under its market energy offers, if they paid their bills on time.
But those discounts were calculated from the company's market offer rates which were higher than its standing offer rates available to consumers.
The Federal Court concluded this meant the effective discounts were smaller than claimed, and in some cases there was no discount at all.
"Click Energy's conduct misled consumers into thinking they were getting a significant discount, when in reality these discounts were often much smaller than advertised," says Australian Competition and Consumer Commission (ACCC) Commissioner Sarah Court.
"Click Energy's conduct misled consumers into thinking they were getting a significant discount, when in reality these discounts were often much smaller than advertised."
The ACCC notes that between October 2017 and April 2018, the company told consumers they would save between $84 and $946 if they made the switch to Click Energy, but these claims were also found to be misleading for similar reasons.
"By making these false claims, Click Energy made consumers think they were better off switching to Click Energy, when the advertised savings had nothing to do with switching, but were savings someone already on a Click Energy plan could get if they paid on time," says Court.
The Court also held Click Energy had made false or misleading representations to consumers about when the discounts given to customers who paid on time would be applied to their bills, by not adequately disclosing the applicable conditions surrounding the discounts.
These included that discounts would apply as a credit on a subsequent bill and that no benefit would be received by paying a final bill on time.
"This penalty is a strong reminder to all energy retailers that making misleading pricing claims is unacceptable and in breach of the Australian Consumer Law," says Court.
"The retail electricity market is already too complex and opaque for many households to navigate and get the best deal. Misleading claims like those by Click Energy only make it harder for everyday consumers to make informed choices on a major household expense.
"Consumer and competition issues arising from opaque and complex pricing of essential services, in particular energy and telecommunications, are a 2019 compliance and enforcement priority for the ACCC."
Click Energy was also ordered by the Court to send each affected customer a notice correcting the misleading claims, implement a consumer law compliance program and pay an agreed amount towards the ACCC costs.
Click Energy admitted contravening the Australian Consumer Law, and the Court's decision on penalty and other relief was based on a statement of agreed facts and submissions filed jointly by Click Energy and the ACCC.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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