Origin Companies ordered to pay penalties of $325,000 for misleading consumers about discounts under energy plans

10 February 2015

The Federal Court of Australia has ordered by consent that Origin Energy Limited and two of its subsidiaries (Origin) pay penalties totalling $325,000 for contravening the Australian Consumer Law (ACL) by making false or misleading representations concerning the level of discount that residential consumers in South Australia would receive under a DailySaver energy plan, in proceedings brought by the Australian Competition and Consumer Commission.

In early to mid-2013, representations were made on the Origin website and in confirmation packs sent to consumers that under a DailySaver energy plan, consumers would receive a discount of up to 16% off Origin’s energy usage charges (for electricity) and up to 12% off Origin’s energy usage charges (for natural gas).

The Court held that the representations were false or misleading because the rates used to calculate usage charges under a DailySaver energy plan, to which the discount would then be applied, were higher than the rates under the subsidiaries standard retail contracts.  As a result, consumers who entered into a DailySaver energy plan in early to mid-2013 effectively received a reduced discount.

“Power bills place considerable pressure on household budgets. Energy plans featuring discounts are designed to attract consumers and do so because they are seen as providing an opportunity to ease that pressure,” ACCC Chairman Rod Sims said.

“Origin misled consumers about the level of discount they would achieve under a DailySaver energy plan – the key feature that would have attracted consumers to the plan.”

“This is a priority area for the ACCC, and we will continue to take appropriate action against energy retailers who engage make false or misleading claims to consumers, particularly where those claims concern discounts or pricing.”

The Court also ordered the publication of a corrective notice in The Advertiser newspaper, notification to all affected consumers and payment of a contribution towards the ACCC’s costs.  The Court’s orders were made with the consent of the parties.

The ACCC brought the proceedings against Origin as part of its work in a priority area for 2014 – Consumer protection in the energy sector with a focus on savings, also referred to as Discounts off what?

This decision comes after the Court recently found that AGL South Australia Pty Ltd had misled consumers

Release number: 
MR 6/15
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