The Australian Competition and Consumer Commission (ACCC) will investigate whether energy retailers are misleading consumers by promoting energy plans that promise savings or value to consumers when they actually offer poor value for the customer, following a complaint from consumer advocacy group CHOICE.
This is the first designated complaint received by the ACCC from CHOICE and the second complaint received under the new designated complaints framework.
“Energy plans that promote ‘savings’ or value may entice many consumers to a particular plan and influence their decision making,” ACCC deputy chair Catriona Lowe said.
“We are concerned that consumers may be misled or deceived by plan names or descriptions of plans that offer ‘savings’ that are not genuine, or that consumers may be discouraged from switching to cheaper plans that are available to them.
“It is essential that energy retailers provide clear and accurate information about their energy plans so that consumers can make informed decisions when choosing an energy provider and plan,” Lowe said.
If the ACCC identifies conduct that may contravene the Australian Consumer Law following its investigation of the issues raised by this complaint, it may take enforcement action where appropriate. The ACCC may also prepare industry guidance or contribute to policy or law reform initiatives.
CHOICE’s designated complaint to the ACCC also raises issues in relation to consumer confusion from retailers’ use of identical names for plans with different rates and energy retailers prompting consumers to change plans when the recommended plan is not available to them.
These additional issues arise particularly in the context of ‘Better Offer’ and ‘Best Offer’ messages included on consumers’ energy bills. Energy retailers are required to regularly include a message on bills to residential customers to alert them if they can save money by switching to a different plan with the retailer. These messages are referred to as Better or Best Offer messages.
“The issues raised by CHOICE exacerbate the challenges and confusion that consumers may face when navigating the often complex energy market,” Lowe said.
A recent decision by the Australian Energy Regulator (AER) requires retailers that elect to re-use plan names, to provide additional information below certain “Better Offer” messages. This aims to address any customer confusion from some retailers creating newer (and differently priced) versions of existing plans using identical plan names.
The ACCC will continue to engage with the AER and Victorian Essential Services Commission (ESC) on their upcoming review and law reform processes including on their consideration of the issues raised in CHOICE’s complaint.
After careful consideration, the ACCC considers that the issues raised by CHOICE relating to the use of identical plan names in Better or Best Offer messaging with different rates, and Better or Best Offer messages with plans that consumers may not be eligible for, are most effectively addressed through the review and law reform processes currently underway by the AER and the ESC.
