The Australian Competition and Consumer Commission has instituted proceedings against Origin Energy in the Federal Court of Australia, alleging the energy provider made false or misleading representations and engaged in deceptive conduct.
The ACCC alleges Origin Energy made misleading representations to South Australian consumers in early to mid-2013 in regard to the level of discounts that could be obtained through the company’s ‘DailySaver’ plan. The competition regulator says Origin Energy made these representations on its website and in information packs sent to consumers.
ACCC chairman Rod Sims said in a statement energy bills are one of the most significant ongoing costs for households.
“As a result, representations by energy retailers about savings that can be achieved through discounted charges are likely to induce consumers to agree to commence an energy plan because of the opportunity to lower their power bills,” he said.
“This is the second proceeding commenced by the ACCC against an energy retailer in which it is alleged that the retailer has misled consumers about the level of discounts under energy plans featuring discounts.”
The ACCC alleges Origin told consumers they would receive a discount of up to 16% off electricity usage charges with their ‘DailySaver’ plan, when the rates charged to consumers were around 4% higher than Origin’s standard retail contract. Similarly, the regulator alleges Origin told consumers they would receive a discount of up to 12% off natural gas charges when the rate was around 1% higher.
Sims said the proceedings against Origin Energy should serve as a warning to businesses engaging in deceptive conduct over energy prices.
“Energy retailers should be in no doubt that the ACCC will take appropriate enforcement action when it forms the view that a retailer has misled consumers about the savings they can obtain under energy plans.”
Melissa Monks, special counsel at law firm King & Wood Mallesons, previously told SmartCompany the energy sector was one of the ACCC’s key priorities for 2014.
“We will definitely see litigation in relation to the savings ‘discounts off what?’ concerns, likely in the energy sector given the ACCC has been investigating this concern since at least June last year,” she said.
In its Compliance and Enforcement Priorities for 2014, the ACCC announced “drip pricing” was a particular area the regulator wished to tackle. “Drip pricing” is a strategy used by some online retailers to lure customers by promoting competitive prices, but then adding additional charges when they begin processing payments.
Origin Energy was contacted for comment but did not respond prior to publication.
Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
