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.  

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