Energy Watch misled consumers: court
A MISLEADING advertising campaign run by the company Energy Watch has been described as deplorable by Australian Competition and Consumer Commission chairman Rod Sims.
The Federal Court found Energy Watch misled consumers by claiming in advertisements it could save consumers vast sums on their electricity bills. The court action was launched by the ACCC in relation to Energy Watch ads run between January and September last year.
Justice Shane Marshall found 80 Energy Watch advertisements, across various mediums, misled consumers.
He said Energy Watch had represented in its advertising that it compared the rates of all or many of the energy retailers in a person's area, when in fact the service it provided was to compare the rates of a person's current energy retailer with those of the energy retailers with which Energy Watch had commercial agreements in place, referred to as its preferred suppliers.
The court found Energy Watch falsely represented it had an adequate basis to claim it had saved residential customers $386 and business customers $1878 in the 12 months following switching their energy retailer through Energy Watch, and it would save residential and business customers those amounts in the 12 months following switching their energy retailer through Energy Watch.
Mr Sims was scathing in his assessment of Energy Watch's conduct.
"Energy Watch blatantly misled consumers about the service it provides and the savings they could obtain, as Energy Watch was earning commissions from its preferred suppliers for each customer who switched to them using the Energy Watch service," Mr Sims said.
"Both residential and business energy users are increasingly sensitive about the cost of gas and electricity and are looking to reduce their cost.
"To take advantage of these consumers by misleading them in this manner is deplorable."
The court also found Energy Watch's former CEO, Benjamin Polis, contravened the Australian Consumer Law through his role as the voice-over in the radio advertisements.
A further directions hearing has been scheduled for May 25. The relief being sought by the ACCC includes declarations, injunctions, corrective advertising, civil penalties and costs. Civil penalties for corporations are up to $1.1 million and for individuals up to $220,000 for each contravention.
A breakdown of the misleading Energy Watch ads between January and September last year:
- 8 television advertisements broadcast in Melbourne and/or Brisbane
- 9 radio advertisements broadcast in Brisbane
- 33 print advertisements in The Age and Herald Sun newspapers
- A wraparound to an issue of the AFL Record
- 11 billboards in or around Melbourne
- Advertisements on a scoreboard at the MCG during three AFL games