Federal Court finds Energy Watch advertising misleading and deceptive
As the ACCC keeps a close eye on energy retailers, its recent success in the Federal Court against Energy Watch is worth mentioning. The Court found that Energy Watch Pty Ltd, a provider of brokering services for residential and business customers purchasing electricity or gas, misled consumers through its advertising, in breach of the Australian Consumer Law. The judgment can be found here.
The ACCC’s claim concerned six types of representation made on television, the internet, radio, billboards, newspapers, magazines and a scoreboard at the MCG during 3 AFL games in 2011.
In relation to one of the representations, the Court found that Energy Watch and its CEO falsely represented that it made a comparison between a person’s existing energy rates and the rates of all or many of the other energy retailers available in that person’s locale. The representation was false, misleading and deceptive because Energy Watch only compared a person’s existing rate with the rates of its preferred retailers. The comparison did not include all or many of the other energy retailers, despite giving an impression that it did.
With one exception (an advertisement published in Womans Day), Energy Watch admitted that its representations were false. This included a representation that it would save residential customers an average of $486 and business customers $1,878 in the 12 months following switching their energy retailer through Energy Watch.
The matter is next listed for a directions hearing on 25 May 2012 when the ACCC will be seeking declarations, corrective advertising, civil penalties and its costs.