ACCC Takes Action against Lumo Energy for Misleading Discount Offer

Thursday 13 July 2017 @ 9.30 a.m. | Legal Research | Trade & Commerce

It has been revealed that energy retailer Lumo Energy Australia Pty Ltd (Lumo) has paid a penalty of $10,800 after being issued with an infringement notice by the Australian Competition and Consumer Commission (the ACCC).

The ACCC issued the infringement notice because it had reasonable grounds to believe that Lumo had contravened the Australian Consumer Law [the ACL is contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)] by making a false or misleading representation about energy discounts.

Background to the Action

Lumo made a representation on its website in February 2017 that consumers (including those outside of Victoria) could save 33 per cent off their total electricity bill and 17 per cent off their total gas bill if they switched to Lumo.

These discounts were only available to residents of Victoria. Maximum discounts for electricity were substantially less in other states. In addition, Lumo does not offer gas outside Victoria.

The ACCC Commissioner Sarah Court said of the current action:

“Discounted energy plans are very attractive to many Australians who are trying to reduce their energy bills. It is vitally important that any representations made to consumers about discounts are accurate and relevant to them, so that people can make informed decisions about their choice of energy retailer and feel confident in those choices. Consumer confidence can lead to increased switching between retailers, and better competition within the energy market as a whole.”

In a statement Lumo Energy said:

“Lumo Energy stand by, and is proud of its strong culture of compliance, and prides itself on its high level of decency, honesty and transparency. Lumo has always sought to treat their customers in accordance with best practice and applicable legal requirements and is always committed to doing the right thing by its customers. As part of the resolution, Lumo Energy has paid an infringement notice of $10,800 for making a false or misleading representation on their website in February 2017. Lumo fully accept the findings and are pleased to report that there was no immediate impact to our customers, and that this was an isolated case. As a result, Lumo Energy have put in place processes to ensure that this does not occur again.”

Previous Action against Lumo

In February 2017, Lumo Energy also paid penalties when call centre staff allegedly told customers that the Australian Energy Regulator (AER) was responsible for gas price increases, when in fact the rise was due to a commercial decision by Lumo.

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Lumo Energy fined for ‘misleading’ discount offer

Lumo Energy pays penalty for alleged energy offer misrepresentations – ACCC Release MR 84/17

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