LG compensates consumers over misleading energy ratings

Up to $3.1 million will be available in rebates for eligible consumers who bought five popular LG Electronics Australia Pty Ltd air conditioner models that did not comply with the energy efficiency values claimed on rating labels.

"LG sold more than 15,000 mislabelled air conditioners", Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today. 

"LG will also implement new testing procedures to ensure that the energy efficiency of its air conditioners matches the performance indicated by their stated energy efficiency star rating and, where applicable meet, 'minimum energy performance standards'".

LG has given court enforceable undertakings to the ACCC after it raised concerns about the accuracy of energy claims on the five models.

The ACCC investigation followed a complaint by the Australian Greenhouse Office. Check tests conducted on behalf of the Department of Energy, Utilities and Sustainability in New South Wales, and Energy Safe Victoria, found that:
a) the actual cooling output of a number of models of air conditioners sold by LG between particular dates was less than 90 per cent of the rated output
b) the energy consumption of some of the affected models was more than the rated power consumption, and
c) the energy efficiency ratings of the affected models were lower than that claimed by LG, and that of one model was lower than that required by the relevant Minimum Energy Performance Standards (MEPS).

As a result, it is likely that the five air conditioner models use more electricity and, accordingly, cost more to run than would be the case if those air conditioners complied with the values stated on the relevant energy labels.

The ACCC and LG have agreed an estimate of the potential difference in operating costs that may be experienced in respect of each of the five models. LG will compensate purchasers of affected models for the potential increase in operating costs as set out below.

Consumers who purchased these models between the dates listed below and who relied on representations made by LG in relation to the cooling capacity, power consumption or efficiency of that air conditioner should contact LG on 1800 506 154.  Consumers will need to provide LG with their contact details, together with proof of purchase or other evidence reasonably establishing their ownership of an affected model within the next six months.

"The integrity of the Australian energy star rating system is important because it provides a powerful market driven incentive for manufacturers to improve the energy performance of their products", Mr Samuel said. "Consumers need to have confidence that they can use the star rating of an air conditioner to make an informed choice between competing brands.

"The ACCC, the Australian Greenhouse Office and state energy regulators will continue working together to ensure compliance with the energy labelling system".

Background

LG sells a number of models of air conditioners in Australia to which a regulatory regime for energy labeling and minimum energy performance standards apply. Under this regime, certain air conditioners are required to display energy efficiency labels which show (among other information) that air conditioners:

• rated cooling capacity (and heating capacity, if applicable), measured in kW;
• comparative energy consumption for cooling (and heating, as applicable), equal to the rated power input of the air conditioner, measured in kW; and
• star rating for cooling (and heating, as applicable), derived by the application of a formula set out in the Australian/New Zealand Standard 3823, with a higher number of stars corresponding with greater energy efficiency.

The check tests used to determine the rebates that LG will pay to eligible consumers showed the following variance in star rating*.

LG also publishes various rated values in respect of its air conditioners in applications for registration of air conditioners under the regulatory regime, on air conditioner nameplates, in brochures and in other advertising and promotional material.

The regulatory regime provides for tests to be carried out by relevant authorities to determine the accuracy of the claimed rated values.

Sections 52 and 53(c) of the Trade Practices Act 1974 prohibit misleading or deceptive conduct and the making of false or misleading representations that goods have performance characteristics they do not have.

*LG was not required to, and did not make representations about a star rating of the LBNL6081BL / LBUL6080BL model.

LG Inquiries
Phone: 1800 506 154
Mail: Air Conditioner Rebate
LG Electronics Pty Ltd
PO Box 212
HORSELY PARK NSW 2175