Red Energy bears brunt of ACCC crackdown on telemarketing – fined for false claims

Red Energy declares it launched “to shake things up and we’ve been doing a good job of it ever since”, but the Australian Competition and Consumer Commission has bruised that claim with a $26,400 fine for alleged false telemarketing.

The ACCC has fined the retail energy provider $26,400 for the misleading conduct of one of its telemarketing staff.

Red Energy has admitted that the telemarketer made false representations and engaged in misleading and deceptive conduct during unsolicited phone calls to consumers.

The ACCC reported that the telemarketer falsely claimed he was calling to speak to the consumer about the consumer’s energy bill with another energy provider, that he was affiliated with the consumer’s current energy retailer, and that he was not calling to sell anything.

The telemarketer also made false claims to consumers that all energy retailers in NSW must charge consumers the same price for retail electricity, and that all retail electricity prices in NSW are regulated by government.

In addition to paying the infringement, Red Energy will provide a corrective notice and a link to the Australian Energy Regulator’s price comparator website Energy Made Easy on its website homepage.

The company will provide customer rectification for those potentially affected by the situation. It has agreed to review its compliance program to prevent a reoccurrence of a similar situation.

ACCC chairman Rod Sims said in a statement that consumer protection in the energy retail sector is an “enforcement priority” for the watchdog.

“We have previously put energy companies on notice that they will be held responsible for the conduct of their door to door salespeople. The same applies to telemarketing,” he said.

Red Energy chief executive Iain Graham told SmartCompany this morning in a statement that the company was “deeply disappointed that one former sales employee didn’t do the right thing by our customers”.

“We strive for decency and this has been recognised in numerous awards,” he said.

“We respect our customers and do not accept or condone behaviour which is not in line with our values or our high standards of service. This isolated incident is in no way representative of Red and or our 500+ local employees.

“We take this matter very seriously and we have already put steps in place to make Red Energy better for our customers and our people.”

Consumer law expert Katarina Klaric, partner at Stephens Lawyers, told SmartCompany this morning that the penalty imposed by the ACCC appeared to be fair in view of Red Energy’s cooperation with the ACCC.

“If you have a rogue employee, it is best to cooperate with the regulators and they are more likely to get a penalty, rather than end up in court,” she explains.

Klaric says there are many ways to minimise the risk of a situation like this. In telemarketing, she advises training, providing a clear script which should be reviewed for accuracy, monitoring what your team are saying to customers, and dealing with complaints.

She says if complaints are handled well, there is a smaller chance customers will take the issue to an external body such as the ACCC.

Red Energy was launched in 2004 and caters to the Victorian, New South Wales and South Australian markets. Owned by Australian company Snowy Hydro, it employs over 300 people and has a Melbourne-based head office.