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Trading Act Breaches By Empower Sales Agent

Conclusion Of Prior Fair Trading Act Breaches By Empower Sales Agent

The Commerce Commission has concluded its prosecution of Empower in relation to past breaches of the Fair Trading Act by a sub-contracted sales agent.

The breaches occurred during the period October 2001 – March 2003, with all but one of the breaches occurring prior to November 2002.

While the breaches occurred prior to Empower coming under the direct management control of Contact Energy in July 2003, Empower does not countenance any behaviour by any agent acting on its behalf or employee that is not in keeping with the highest standards of ethical behaviour and that does not comply with consumer protection law.

Empower did not dispute the charges in recognition that such breaches constitute wholly unacceptable sales practice and because of its desire to expedite resolution of the matters raised.

As noted by Judge O’Donovan in his judgment, Empower’s co-operation with the Commerce Commission throughout the investigation was exemplary.

Empower has been fined $30,000.

The Judge noted that Empower’s actions throughout the period were entirely appropriate; that Empower did not itself engage in dishonest or misleading conduct; and that it was difficult to see what more Empower might have done to ensure compliance, review procedures, and implement improvements.

Since 1 July 2003, when Empower came under Contact Energy’s direct management, Contact Energy’s sales team has conducted all of Empower’s sales.

Contact Energy takes these matters seriously and has comprehensive procedures, policies and training on fair trading which are constantly monitored. Empower continues to demand the highest standards of ethical behaviour in relation to its new and existing customers.

Explanatory note:

Contact Energy purchased 100 percent of Empower on 30 June 2000. From 1 July 2000 to 30 June 2003, Contact Energy contracted Remco Management Limited to manage Empower, before Empower came under the direct management control of Contact Energy on 1 July 2003.

During the period when the breaches occurred all Empower residential sales activity was contracted by Remco to a company at that time called The Sales Company Limited (known as Salesco). Salesco in turn contracted or employed telemarketers, door-to-door salespeople and verifiers who checked the accuracy of the sale. The directors of Remco and Salesco were former directors of Empower. Under the management agreement between Empower and Remco, it was Remco’s responsibility to ensure compliance with the Fair Trading Act by the sales agents working for Salesco.

The breaches relate to misleading sales practices during the period October 2001 – March 2003 by employees or contractors of Salesco. As noted above, all but one of the breaches occurred prior to November 2002. Throughout that period, Empower sought and was given repeated assurances by Remco that Salesco was complying with the Fair Trading Act.

Empower took further actions to monitor Salesco and to refine fair trading procedures to ensure compliance by Salesco, including: From May 2002 all Salesco telesales verification calls were recorded From September 2002 all Salesco telesales were recorded In November 2002 the Empower Board instructed Remco that all door-to-door sales engaged by Salesco on behalf of Empower must cease. That sales channel was permanently closed from that time.


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