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Mercury Energy fined $14,000 for misleading advert

Mercury Energy fined $14,000 for misleading advertising

Poor processes and not learning from its mistakes cost Mighty River Power, trading as Mercury Energy, $14,000 in the Auckland District Court yesterday. The company pleaded guilty to two charges of breaching the Fair Trading Act.

The Commerce Commission launched an investigation into Mercury Energy following a customer complaint regarding a television promotion, aired in the Auckland region in two blocks between October 2001 and February 2002, which promised to read consumers’ electricity meters monthly.

The Commission’s investigation established that of Mercury Energy’s two supply areas, Vector and United Networks Waitemata, only Vector customers had their meters read monthly at the time of the advertising. Following the unsuccessful implementation of monthly reading in the Waitemata area after the first block of advertising had aired, Mercury Energy took no action to alter or remove the second block of advertising.

In handing down the sentence, Judge Toomey commented that by the time the second block of ads was aired, Mercury Energy was aware that monthly meter reads were not in place and may have been some time away. “Action should have been taken to prevent them going to air,” he said.

Chair John Belgrave said that the Commission has a role in making sure that competition is fair in the electricity industry and that consumers are not misled.

“Since the deregulation of the electricity industry, retail companies have been operating in a far more competitive environment and are still trying to differentiate themselves to improve their market share,” he added.

“It is important that companies do not attempt to induce customers to switch based on promises they are unable to meet at the time.”

Background Mighty River Power Limited owns two electricity retailers, Mercury Energy and First Electric. In the Auckland region, Mercury Energy is divided into two power supply areas. Mercury Energy’s Vector area covers the Auckland CBD, west to New Lynn, south to Papakura and all areas east of the CBD. Mercury Energy’s United Networks’ Waitemata area covers all areas north of the Auckland Harbour Bridge to Warkworth, west of New Lynn to the Waitakere’s, including Titirangi and Henderson. The Vector area has 220,000 customers and United Networks Waitemata has 11,000.

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