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Group discount website One Big Switch, which boasts more than 1 million members, has paid two fines worth $25,200 after the consumer watchdog alleged it misled customers over energy discounts.
The Australian Competition and Consumer Commission (ACCC) said RevTech Media, the company behind One Big Switch, had paid the infringement notices after the regulator pointed to problems with offers advertised in south-east Queensland.
One Big Switch was co-founded by Kevin Rudd’s former press secretary Lachlan Harris. News Corp is also a shareholder of One Big Switch.
“What One Big Switch have done wrong is advertising an offer to customers that talked about a 27 per cent discount and savings of up to $372 if they switched to a particular Click Energy offer,” ACCC chairman Rod Sims told the ABC.
“There were two problems. One was the 27 per cent was off a number that was 9 per cent higher than Click’s undiscounted standing offer, so in fact for most people that discount was closer to 20 per cent.
“Secondly, the savings of $372 were calculated compared to the average standing offer of Click’s competitors as distinct to the average market rate of those competitors.”
Mr Sims explained that many customers of Click’s competitors were getting much better pricing, making any potential savings smaller.
“So whether you saved $372 or not depended on whether or not you were stuck on a standing offer of one of those other players — you’d save a lot less if you were on a market offer,” he said.
“When you have a discount being advertised and it’s not off the standing offer of that company, it’s off an inflated offer, before you even get to calculate the discount, I think that’s pretty bad and misleading.”
Code of conduct needed for comparison websites: ACCC
Earlier this month, the ACCC released its report into the national electricity market, which included recommendations for comparison websites.
The ACCC said there needed to be a mandatory code for such websites, so offers were based on customer benefit and not commissions.
Mr Sims said the One Big Switch case served as a warning to other comparison sites.
“One Big Switch is a company that makes its money from receiving commissions and we want to make sure that it, like all other comparator websites, puts the consumer first rather than puts their commissions first,” he said.
“And also makes clear that they are getting commissions and makes clear how those commissions are paid, so a lot more transparency for consumers.”
In a statement, RevTech Media told the ABC it “accepted the umpire’s decision and has, since November 2017, required all energy offers to be expressed as a headline discount off the retailer’s standing offer rates”.
“Revtech Media looks forward to regulators and governments developing a simple, common price benchmarking system that will allow consumers to easily compare the price of energy offers — which they cannot currently do.
“At RevTech Media, before we promote any offer to members, we undertake a detailed analysis of the combined effect of the discounts and the underlying rates to ensure the offers are highly competitive for on-time payers.
“We’ve undertaken this expert analysis for all offers we have presented to members — including any Click Energy offers — and we stand by their price competitiveness in the market at the time.”
The ACCC said, between July and November 2017, One Big Switch advertised a 27 per cent discount for consumers in south-east Queensland who switched to Click Energy’s Big Switch Up offer.
Topics: electricity-energy-and-utilities, consumer-protection, regulation, australia
