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ACCC takes action against Origin for alleged false or misleading representations

8 May 2014 The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court of Australia against Origin Energy Limited (Origin) alleging that Origin made false or misleading representations and engaged in misleading or deceptive conduct.

The allegations relate to representations made by Origin to residential consumers of electricity and/or natural gas in South Australia about the level of discounts off energy usage charges that could be obtained under Origin’s DailySaver energy plans.

The ACCC alleges that Origin represented to consumers in early to mid-2013, on its website and in confirmation packs it sent to consumers, that under a DailySaver energy plan they would receive a discount off the energy usage charges they would otherwise pay Origin.

The ACCC alleges that Origin represented to consumers that they would receive:
a discount of up to 16% off the electricity usage charges they would otherwise pay Origin, when in fact the rates charged to consumers under a DailySaver plan were approximately 4% higher than under Origin’s standard retail contract; and
a discount of up to 12% off the natural gas usage charges they would otherwise pay Origin, when in fact the rates charged to consumers under a DailySaver plan were approximately 1% higher than under Origin’s standard retail contract.

“The ACCC alleges that, from day one, consumers on a DailySaver energy plan were short-changed on their discount,” ACCC Chairman Rod Sims said.

“Power bills are one of the most significant continuing 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.”

“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. 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,” Mr Sims said.

The ACCC is seeking pecuniary penalties, declarations, injunctions, publication orders, a compliance program, redress for affected consumers, and costs.

In the ACCC Compliance and Enforcement Priorities for 2014, the ACCC announced its priority in dealing with consumer protection in the energy sector with a particular focus on savings representations, also referred to as ‘discounts off what?


Release number: NR 108/14

_____________________________________

ACCC takes action against Origin Energy and Salesforce for door-to-door selling

27 September 2013 The Australian Competition and Consumer Commission has filed proceedings in the Federal Court against Origin Energy Retail and Origin Energy Electricity (Origin Energy), and marketing company SalesForce, in relation to their door-to-door sales practices.

“These are the fifth proceedings the ACCC has taken involving the marketing activities carried out by energy retailers at the door of consumers’ homes,” ACCC Chairman Rod Sims said.

“The ACCC alleges that SalesForce sales representatives acting on behalf of Origin Energy made numerous false and/or misleading statements to consumers and breached the Unsolicited Consumer Agreement (UCA) provisions of the Australian Consumer Law.”

“The allegations also involve several instances of unconscionable conduct as well as instances of alleged undue harassment and/or coercion by sales representatives, which the ACCC considers to be particularly serious,” Mr Sims said.

The allegations involve visits by sales representatives to the homes of thirteen different consumers across New South Wales, Victoria, Queensland and South Australia between September 2011 and December 2012.

The alleged conduct includes sales representatives making false or misleading representations:

that there was a government requirement for the consumer to change providers to Origin;

that the consumer had been overcharged by their current electricity provider; and/or

that Origin had approval from, or was affiliated with, the Electricity Trust of South Australia

The UCA provisions were specifically designed to protect consumers from unscrupulous conduct in door-to-door transactions. The alleged breaches of the UCA provisions include that the sales representatives:

failed to inform the customer of their right to cancel the contract within the 10-day cooling off period;

called on the consumer outside permitted hours;

failed to clearly advise the consumers that their purpose was to seek the consumer’s agreement to a supply of retail electricity and/or gas by Origin Energy; and/or

failed to leave the consumer’s premises on request.

“The ACCC is also alleging that the sales representatives engaged in unconscionable conduct, which involved particularly vulnerable consumers who were unable to understand the agreement. It is alleged that the sales representatives in these instances employed undue pressure and/or unfair tactics in their dealings with these vulnerable consumers,” Mr Sims said.

Further, the ACCC is alleging that the sales representatives harassed and/or coerced some consumers. This includes allegations that sales representatives persistently negotiated with and pressured consumers, despite the consumer repeatedly indicating that they were not interested, as well as allegations that sales representatives coached consumers to consent to sign up with Origin during a verification call.

The ACCC is seeking pecuniary penalties, declarations, injunctions, an order for corrective notices, an order for Origin Energy and SalesForce to establish and implement compliance programs, and costs.

The ACCC’s guide for consumers Knock! Knock! Who's There? provides information about consumer rights in relation to door-to-door marketing.

Background

In September 2012, the Federal Court ordered Neighbourhood Energy and its former marketing company Australian Green Credits Pty Ltd to pay total penalties of $1 million by consent for illegal door-to-door marketing practices.

In May 2013, AGL Sales Pty Ltd and AGL South Australia Pty Ltd were ordered to pay a total of $1.55 million by consent for false and misleading representations and breaches of the UCA provisions. Marketing company CPM Australia Pty Ltd was also ordered to pay $200,000 for its role in the conduct.

In March 2013, the ACCC instituted proceedings against EnergyAustralia Pty Ltd (formerly TRUenergy Pty Ltd) and four marketing and sales companies engaged by EnergyAustralia in relation to alleged false and misleading conduct and breaches of the UCA provisions. These proceedings are continuing.

In September 2013, the ACCC instituted proceedings against Australian Power & Gas Company in relation to alleged false and misleading conduct, breaches of the UCA provisions and one instance of unconscionable conduct. These proceedings are continuing.


Release number: MR 220/13

 

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