ACCC warns of on-the-spot fines for excessive price rises under carbon tax

The competition watchdog has warned businesses against using the carbon tax as an excuse for excessive price rises, with the Australian Competition and Consumer Commission warning of on-the-spot infringement notices for companies and individuals found to have made false, misleading or deceptive claims.

With the Government’s controversial carbon tax legislation being debated in Parliament this week, ACCC chairman Rod Sims says the regulator will be able to issue a “substantiation notice” to businesses, which will compel them to provide information about their price increase within three weeks.

Substantiation notices cover a wide range of concerns, including advertising, projected earnings, and product safety and environmental claims. The ACCC says if a person does not respond to a substantiation notice, or does not respond within the compliance period, it may issue an infringement notice penalty of $3300 for a body corporate or $660 for an individual.

Alternatively, the ACCC may seek an order from the court for payment of a pecuniary penalty of up to $16 500 for a body corporate or $3300 for an individual.

The ACCC has been granted $12.8 million over four years to police carbon claims under existing consumer laws. Penalties for infringement notices will mostly be fixed at $6,600 for a corporation, or $66,000 for a listed corporation, and $1320 for an individual for each alleged contravention.

Sims yesterday flagged more announcements on the issue over the next couple of months.

“It will revolve a fair bit around substantiation notices which we have the power to issue, which, when people make a claim, we can make sure they are examined,” he is quoted telling an energy conference in Canberra yesterday.

But gouging under the carbon tax, planned to become effective in July next year, is not the only issue on the ACCC’s radar.

Dodgy practices by door-to-door salespeople of energy products and energy comparator websites are also in the competition regulator’s sights, with Sims expressing concern over misleading and deceptive conduct by marketers targeting vulnerable people such as the elderly and those with limited understanding of English.

In a warning to energy retailers and their workers, Sims says individuals found to have misled consumers could be fined up to $220,000, while companies face fines of up $1.1 million per contravention.

“Door-to-door marketing is very common in this sector and is seen by energy retailers as an effective way of gaining market share and building customer volume. In doing so, some engage in aggressive tactics and confuse consumers,” Sims said in a speech yesterday.

“The ACCC is currently investigating a number of complaints in the door-to-door marketing sector, as well as the conduct of energy comparator websites, particularly in regard to the savings consumers can make in switching retailers.”