FCA proceedings commenced by the ACCC against Sumo

FCA proceedings commenced by the ACCC against Sumo

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The Australian Competition and Consumer Commission (ACCC) has commenced proceedings in the Federal Court of Australia alleging that Sumo Power Pty Ltd (Sumo) made false or misleading representations to Victorian consumers in relation to its electricity plans.

The ACCC alleges that between June and November 2018, Sumo promoted 12-months electricity plans with large discounts including pay on time discounts of up to 43% while planning to substantially increase the charges applied to those customers within a few months, or knowing it was likely to do so.

The ACCC claims that sumo caps that represented to consumers that it would maintain, or not materially increase those low rates and consumers would get the benefit of the pay on time discounts for a 12-month period. In November 2018, Sumo substantially increased the underlying rates it charged for certain consumers by approximately 30% to 46%. The ACCC alleges that there was a predetermined strategy which Sumo had not disclosed to consumers.

You can read more about the law of misleading and deceptive conduct here and more on the application of that law to electricity retailers here.

The ACCC further alleged that Sumo substantially misled consumers when advising them that the price increases were due to wholesale energy cost factors including generation costs rises and climate change and ageing assets forcing the closure of cheap coal-fired power stations.

The ACCC is seeking penalties, declarations, publication orders, complaints program orders, consumer redress, and legal costs.  

LPE Pays Penalties for alleged contraventions of the Electricity Code

LPE Pays Penalties for alleged contraventions of the Electricity Code

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The Australian Competition and Consumer Commission (ACCC) has announced that electricity provider Locality Planning Energy Pty Ltd (LPE) has paid a penalty of $10,500 after it was issued with an infringement notice for an alleged contravention of the Electricity Retail Code.

This represents the first enforcement action taken by the ACCC for an alleged breach of the Electricity Retail Code.

The Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 (the Code) applies to all electricity retailers that supply to small customers in the applicable distribution regions of New South Wales, South Australia and south-east Queensland. You can read more about the Code on Law Quarter’s website here

The Code sets a cap on standing offer prices and specifies how prices and discounts must be advertised, published or offered. The Code was introduced in July 2019 with the objective of reducing confusion and making it easier for consumers to compare retail electricity offers.

It was alleged that LPE failed to:

  • compare its offered price to the reference price, which is the benchmark price set by the government;
  • display the total amount a customer consuming an average amount of electricity would need to pay in a year based on the offered price; and
  • display the distribution region and type of small customer to witch that offer applied.

An example of the advertising in question was published by the ACCC in its notice and is below: