The Federal Court has ordered EnergyAustralia to pay $1 million for breaching Australian Consumer Law in its telemarketing practices.

EnergyAustralia will pay $1 million and its former telemarketing company, Bright Choice, will pay $100,000 after they were found to have made false or misleading representations in telephone sales.

Between August 2012 and April 2013, Bright Choice representatives, acting as agents of EnergyAustralia, telephoned consumers residing in Victoria, New South Wales, and Queensland for the purpose of marketing EnergyAustralia electricity and gas plans.

During those calls, Bright Choice stated that they were calling on behalf of EnergyAustralia, or on behalf of Telechoice which had “partnered” with EnergyAustralia, and claimed that:

  • the consumers were not being signed up to an energy agreement
  • the consumers would be sent information, following which they could decide whether or not to sign up to an energy agreement
  • EnergyAustralia and Bright Choice would not, without further communication with the consumer, treat the consumer as if they had agreed to enter into a new plan for the supply of electricity and/or gas with EnergyAustralia.

In fact, those consumers were recorded by Bright Choice as having agreed to enter into a contract and EnergyAustralia then sent each of them a “Welcome Pack” containing contractual documents and treated each consumer as having agreed to switch energy services to a new EnergyAustralia plan.

“This decision demonstrates that companies cannot avoid their obligations under the Australian Consumer Law by engaging sales agents,” ACCC Chairman Rod Sims said.

“The Court has now ordered significant penalties against some of Australia’s largest energy retailers for misleading sales tactics. However, the ACCC will continue to monitor the energy sector. Whether selling door-to-door or telemarketing, the ACCC will take action to ensure compliance with the Australian Consumer Law,” Mr Sims said.

In separate concurrent proceedings brought by the Australian Energy Regulator (AER) against EnergyAustralia, the Court found that EnergyAustralia failed to obtain explicit informed consent before transferring or entering into a new energy contract with certain customers in South Australia and the Australian Capital Territory.

This has led to further penalties of $500,000 on EnergyAustralia.

It is not the first time EnergyAustralia has been burned for its aggressive sales tactics.

In April 2014, EnergyAustralia agreed to pay a penalty of $1.2 million for unlawful door-to-door selling practices and consented to the declarations and other orders sought by the ACCC in that proceeding.