Energy retailer CovaU Pty Ltd has paid $33,300 in penalties after the ACCC issued it with three infringement notices for alleged contraventions of the Electricity Retail Code.
The ACCC has reasonable grounds to believe that CovaU contravened the requirements of the Code by advertising the prices of three residential electricity plans on its website without stating a percentage difference to the comparison price set by the government, between 27 June and 19 July 2021.
Retailers are required to include the percentage difference to the comparison price in electricity offers to residential and small business customers. This provides a consistent benchmark to see how a plan compares to other offers from a glance.
CovaU failed to state the percentage difference for the following offers:
- ‘Freedom Plus Online – Residential Essential Single’ plan
- ‘Freedom Plus Solar – Residential SA Single’ plan
- ‘Freedom Plus Online – Residential Endeavour Single’ plan
CovaU has acknowledged that it published a total of 79 plans during this period that did not state a comparison percentage as required by the Code.
“Comparison pricing is vital for consumers searching for the best electricity deal, as it provides a consistent benchmark. The failure to publish comparison pricing, as required by the Electricity Retail Code, deprives consumers of an opportunity to compare the individual plans on a like-with-like basis,” ACCC Deputy Chair Mick Keogh said.
“We are disappointed this is the second time CovaU has paid penalties in relation to its energy plans, and we will continue to monitor compliance with the Code and Australian Consumer Law by CovaU and other electricity providers.”
Background
CovaU is an Australian electricity and gas retailer operating in Australia which services both residential and business customers.
In July 2019, CovaU paid penalties of $12,600 for alleged misleading claims about discounts available on its energy plans in breach of the Australian Consumer Law.
The Electricity Retail Code was introduced in July 2019 to reduce confusion and make it easier for consumers to compare retail electricity offers. It imposes rules on electricity providers for how they must advertise prices and conditions on market and standing offers, including stating the lowest possible price of the offer, distribution region and small customer type.
The Code limits the standing offer prices that are charged to consumers in New South Wales, South Australia and south-east Queensland using a cap called the Default Market Offer (DMO) and requires retailers to advertise their prices to residential and small business customers by reference to the DMO and include certain information.
Note
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law, which also sets the penalty amount.
The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain consumer protection provisions in the Australian Consumer Law.
Example of CovaU Electricity Plan advertisement
Example of advertisement that complies with the Electricity Retail Code
