Contact Energy refunds $280,000 to misled customers

Contact Energy customers didn't get their proper discounts when closing accounts, says the Commerce Commission. Photo / Brett Phibbs

Contact Energy has agreed to refund 25,000 customers more than $280,000 after admitting it misled some customers about the amount payable for final bills.

The Fair Trading Act breach came after Contact Energy failed to carry over a customer's prompt payment discount from their unpaid previous month's invoice to the final bill when the customer closed their account.

The error affects customers who closed their Contact accounts between April 1, 2008 and April 15, 2011 and who did not receive their prompt payment discount, or dual fuel discount on their final bill.

The Commerce Commission said Contact Energy would be contacting customers affected by mail in the coming weeks to arrange the refund.

Greg Allan, Commerce Commission Enforcement Branch Manager said the result was a "win-win for consumers and ultimately taxpayers" because it avoided a lengthy and costly investigation and potential court hearings.

It also served as a reminder to customers to take the time to check that the relevant discounts have been applied to their bill, rather than assuming the company has 'got it right'.

"We're pleased to have reached a settlement with Contact Energy that addresses both misleading practices but also makes direct payment back to the affected customers.

"Contact Energy co-operated fully with our investigation and admitted liability at the first opportunity," Allan said.

In response to the Commission's concerns, Contact Energy has adopted a compliance programme to ensure future compliance with the Fair Trading Act.