Gas retailer pays penalties for “misleading” prices

gas retailer

Wesfarmers Kleenheat Gas Pty Ltd (Kleenheat) has paid penalties totalling $25,200 after the ACCC issued two infringement notices for alleged false and misleading representations made about gas prices.

From April 29, 2018, Kleenheat advertised that new customers in Western Australia could “Save 35% on gas charges” by switching to its Monthly Energiser Plan.

The ACCC alleged that this representation was false and misleading because the discount only applied to a customer’s gas usage charges (but not to other charges, like the gas supply charge or account fee).

The ACCC also alleged that the overall impression created by the advertisements was that the discount would apply while the consumer remained a customer, when in fact the discount only applied for 12 months, after which it dropped to 25 per cent.

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These advertisements appeared on television, radio, Facebook, Spotify, billboards, bus panels and emails. Some advertisements contained a reference that “Ts &Cs apply” while others included references in fine print explaining the deal.

Kleenheat is Western Australia’s second largest gas retailer, and thousands of customers took up the Monthly Energiser Plan after the advertisements, which have now been withdrawn.

ACCC Acting Chair Roger Featherston said, “The ACCC alleges that Kleenheat made representations to potential customers which were false and may have caused some people to switch their account to Kleenheat from other gas suppliers.

“WA gas customers who saw the Kleenheat advertisements could easily have assumed the discount was permanent and applied to the entire bill.

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“People who took up the plan saved about $40 less in the first year than they would have saved relying on Kleenheat’s claim of a 35 per cent saving on gas charges.

“Qualifications which explain the terms and conditions of a deal must be prominent and not only in fine print, so that consumers understand what the deal involves.”

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person or a business has contravened certain consumer protection laws.