ACCC takes Iselect to court for allegedly misleading consumers into paying more for electricity

“We were particularly concerned with the issues raised about Iselect’s claims because we know consumers go to comparison sites to get the best deal, and for an impartial and objective comparison of complex energy plans. We allege they were not getting that so they may be paying more for electricity than they should be,” ACCC chair Rod Sims said of the claims, which have allegedly been occurring since at least November 2016.

“Iselect told consumers they would help them compare all energy plans available in their area from all their partner retailers. But we claim they were actually favouring some partner retailers over others, such as those on its ‘Preferred Partner Program’ who were allowed to have more plans available on the Iselect website that excluded and targeted certain consumers. These preferred retailers paid Iselect higher commissions.”

The ACCC stated that Iselect did not disclose to consumers that it was allegedly limiting the number of plans shown, and choosing the most ‘competitive’ plan, based on these commercial arrangements.

Additionally, the regulator alleges that cheaper plans, not shown in the comparison results, were available on the Australian government’s Energy Made Easy website, which shows all energy plans available in a consumer’s area.

“When comparison sites mislead consumers, it further adds confusion to the already complicated retail energy market, denying people an informed choice on what is often a major household expense,” said Sims.

“The ACCC’s Retail Electricity Pricing Inquiry recommended a mandatory code for comparator websites that, if it was in place, would have meant that Iselect would have been unable to implement its ‘Preferred Partner Program’ in the way the ACCC alleges they did. In addition, we will continue to take action to address consumer and competition issues arising from opaque and complex pricing of essential services, in particular energy services which is a key compliance and enforcement priority for the ACCC this year.”

The legal proceedings, which were commenced in the Federal Court, involve the ACCC demanding that Iselect stops engaging in the practice, faces penalties and pays its legal costs.

An Iselect spokesperson provided the following comment to Mumbrella:

“Iselect knows from speaking to its customers that many Australian households are struggling with high energy prices and are looking for help to find better value.  The company believes its energy comparison service strengthens competition, ethically and in accordance with industry practice.

“As an Australian company, Iselect takes its obligations under [the] Australian Consumer Law very seriously and has processes in place to ensure compliance.

“Iselect has worked cooperatively with ACCC throughout its investigation. As the matter is now before the Federal Court, the company is unable to make any further comment.”