Three marketing companies fined by Federal Court with Energy Australia for mis-selling

By AdNews | 8 April 2014

Three marketing companies have been fined $290,000 for their role in mis-selling electricity to people on their doorstep. The firms were penalised as the Federal Court ordered Energy Australia to pay a penalty of $1.2 million for misleading customers while trying to get them to switch suppliers.

The case was bought by the ACCC.

Multiple Stories Pty Ltd (trading as Aegis Direct) was today or to pay $200,000, Australian Sales and Promotions Pty Ltd to pay $50,000, while Sales Marketing and Real Technologies – SMART Pty Ltd to pay $40,000. The three firms were used to engage and train the sales reps involved in the illegal sales conduct.

ACCC Commissioner Sarah Court said the order sends a "clear message" to companies that sell on the doorstep, particularly energy companies. "Energy companies must act now to ensure that their sales agents and representatives comply with the Australian Consumer Law and do not engage in illegal sales practices,” she said.

The sales reps acting on behalf of the energy suppler were found to have made false and misleading representations, such as pretending the company had Energy Australia's tariff had approval or sponsorship from the government, and that there was a mandated rate that energy suppliers were supposed to charge, and that rival firms were charging those householders more.

Australian Power & Gas Company Limited had to pay a similar fine for similarly illegal practises last November, while in May AGL Sales Pty Ltd and AGL South Australia Pty Ltd were ordered to pay combined penalties of $1.555 million for the same kind of tactics. In that instance another marketing company - Marketing company, CPM Australia Pty Ltd - was also slapped with a $200,000 fine.

In September 2012 Neighbourhood Energy and its former marketing company, Australian Green Credits Pty Ltd, was ordered to pay total penalties of $1 million.

Proceedings against AGL South Australia Pty Ltd are ongoing and Origin Energy could be facing a heavy fine with the Federal Court examining allegations of false or misleading representations, unconscionable conduct, and undue harassment and/or coercion. Marketing company SalesForce Australia Pty Ltd is also involved in the proceedings brought against Origin.

Energy Australia has also been ordered to take out corrective website and newspaper adverts.

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