The consumer watchdog has reported an alarming rise in complaints about misleading ”green” advertising, particularly by energy retailers - but its hands are tied until delayed legislation is passed.
Graeme Samuel, chairman of the Australian Competition and Consumer Commission, told The Age that a sharp rise in complaints about green ads - from almost none two years ago to about 500 since early 2008 - was ”very unusual”. He said such complaints were becoming as common as those about telecommunication companies.
”Five hundred suggests there’s more than a moderate problem here, that this is an increasing problem,” Mr Samuel said. ”It’s a new area and in some cases marketers don’t understand, but in most cases marketers do understand and they are over-selling.”
Over the past two years, the ACCC has taken action in response to green claims by companies including Woolworths, SAAB and Origin Energy, and Mr Samuel said that big companies had become more careful. ”All the indicators are at present that the bigger companies are being very careful,” he said. ”They know the ACCC has made it very clear we won’t tolerate excessive claims being made because we are concerned about consumers being duped.”
But in the past month, the ACCC has launched action against two smaller operators - power supplier Global Green Plan and carbon broker Prime Carbon, which is fighting the ACCC in court.
Mr Samuel warned that unless Parliament passed national consumer laws that would give the ACCC more power - including the ability to issue fines up to $1.1 million for misleading conduct - the regulator was operating with ”one arm tied behind our back”. The laws were introduced last year and were due to be in force on January 1, but their passage was delayed by the defeat of the carbon pollution reduction scheme.
”We can get corrective advertisements, for big companies there’s a reputational damage that occurs,” he said. ”But financially they are no implications at the present time for making misleading comments about green issues … we’re very anxious that the law be passed as soon as possible. The sooner it’s there, the sooner we can start tackling things.”
A spokeswoman for Consumer Affairs Minister Craig Emerson said the legislation would be dealt with after Parliament sits next week.
The ACCC’s most recent green-related action ordered Global Green Plan, which was Government-accredited to provide renewable energy under the name GreenSwitch, to buy 4000 renewable energy certificates - now worth about $140,000.
GreenSwitch customers had paid for the certificates, but the company had failed to purchase them over two years. Global Green Plan was caught out and deregistered in September 2008 but continued to trade until November.
The ACCC said such behaviour threatened the credibility of the market and that it was ”simply unacceptable” to take money from customers and not use it as intended.
That undertaking came a day after the consumer watchdog said it would take action in the Federal Court against carbon trader Prime Carbon, which it alleges made misleading claims about the National Environment Registry and the National Stock Exchange of Australia.
Renee Garner, a climate change lawyer at Freehills, said the Prime Carbon case highlighted the need for organisations to ensure that green claims made about related third parties were also accurate.
”Companies need to consider carefully what they are saying about associated entities so as not to mislead or deceive - for example, not saying a supplier of theirs is ‘green’.”
