One Big Switch pays penalties over electricity discount and savings claims

23 July 2018

Revtech Media, the company behind group-discount website One Big Switch, has paid penalties of $25,200 after the ACCC issued two infringement notices for alleged false and misleading energy price representations.

Between July and November 2017, One Big Switch advertised a 27 per cent discount for consumers in south east Queensland who switched to Click Energy’s ‘Big Switch Up’ offer.

“The ACCC alleged that this representation was false or misleading because calculation of the 27 per cent discount was based on rates under the Big Switch Up offer which were higher than Click Energy’s ‘standing’ offer rates,” ACCC Chair Rod Sims said.

One Big Switch also advertised that consumers would save up to $372 a year if they switched to Click Energy. The ACCC alleged that the advertised savings were false or misleading because they were based on a comparison between Click Energy’s discounted market offer and the undiscounted ‘standing’ offers of EnergyAustralia, Origin and AGL.

The ACCC also alleged that One Big Switch did not know what a particular customer was paying under their current plan with another retailer, and so did not have reasonable grounds to estimate the savings which could be achieved by switching. 

“The actual savings for some consumers were much less than the amount advertised by One Big Switch,” Mr Sims said.

“We allege that as a result of these claims, consumers were misled into assuming they were getting bigger discounts and savings than they would actually receive.”

“Electricity costs are one of the most significant expenses households have to face. Businesses are reminded that any misrepresentations made to consumers about electricity prices will be met with ACCC action,” Mr Sims said.

“The ACCC has recently made a number of recommendations to reduce the price of electricity. We believe customers need to be able to easily compare prices to make informed decision about getting the cheapest price for their electricity.”

Background

In July 2018, the ACCC instituted proceedings in the Federal Court against Click Energy’s parent company Amaysim Energy, alleging it made false or misleading marketing claims about discounts and savings for consumers.

Also in July the ACCC published the final report on its Retail Electricity Pricing Inquiry. One of the recommendations is to abolish current retail ‘standing’ offers, which are not the same between retailers and make it difficult for consumers to compare discounted prices.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Competition and Consumer Act 2010 (CCA). 

The ACCC can issue an Infringement Notice where it has reasonable grounds to believe a person has contravened certain provisions of the CCA or the Australian Consumer Law.

Representations made between July and November 2017 on the One Big Switch website:

 

Release number: 
135/18
ACCC Infocentre: 

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