A message to all businesses: You are responsible for the actions of your staff, which includes employees, agents and contractors, says Commerce Commission's Fair Trading Director Deb Battell.
The call comes after the Commission agreed settlement with electricity company Empower Limited over three breaches of the Fair Trading Act which involved false and misleading representations made by its sales agents in Auckland and Lower Hutt.
"This situation reminds traders and retailers that they are responsible not only for the actions of staff, but also the actions of contractors and agents," said Ms Battell.
The Commission investigated complaints from three consumers who were persuaded to switch from their incumbent electricity supplier to Empower's network. In two cases, Empower's agents falsely represented that the consumers would continue to be supplied by their existing supplier. One consumer thought she was agreeing to make a donation when she was in fact signing an authority to switch suppliers. Another was told that her supplier had been taken over by Empower Ltd.
Empower Ltd represented to the third consumer that he had agreed to switch electricity supplier when he had not. Even after being advised of this by the consumer, Empower Ltd continued to send statements to the consumer.
"While the individual complaints differ in detail, they all consistently show that the sales agents misled the consumers into agreeing to switch from their incumbent supplier to Empower Ltd," added Ms Battell.
"It is not acceptable for a sales agent to claim that services are supplied by a particular trader when clearly they are not. Nor is it acceptable for traders to represent that consumers have agreed to acquire goods or services when they have not."
Empower Ltd acknowledges that the actions of its sales agents were liable to mislead the consumers concerned. As part of the settlement, it has agreed to put in place measures so staff are fully aware of their liabilities under the Fair Trading Act 1986.
In addition, Empower Ltd will take responsibility for informing consumers who switch that their electricity contracts with former suppliers will be terminated.
Empower Ltd has agreed to provide the Commission with a report of the measures it has taken to implement the requirements instructed by the Commission in three months time.
Media contact: Director of Fair Trading Deb Battell
Phone work (04) 498 0908, cellphone 025 208 0841
Senior Advisor Communications Jackie Maitland
Phone work (04) 498 0920, cellphone (025) 249 3407
