Todd caught up in energy marketing rort

The Commerce Commission is taking Todd Energy, associate companies Bay of Plenty Electricity and King Country Energy, and others to court over an alleged misleading FreshStart power insurance campaign.
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Today the Wellington-headquartered commission issued a statement saying the Auckland District Court had last week fined David Barrowclough Direct Ltd NZ$9000 on five admitted charges of breaching the Fair Trading Act in relation to a PowerPLUS insurance campaign for FreshStart Energy electricity customers from early 2000 to late 2001.

The commission said similar charges had also been laid against Royal Sun Alliance Insurance (New Zealand), Todd Energy and its BOPE and KCE associate companies, though the companies had indicated they would be defending their actions at the yet-to-be-determined hearing,

The commission said David Barrowclough Direct promoted power insurance policies on behalf of the underwriters, Royal Sun Alliance, and the power companies February 2000 to December 2001. The offer of power insurance was made to commercial and residential account holders of the power companies by way of telemarketing and mail-out brochures.

The commission said a prize draw, to win free power for customers who took up the insurance, was promoted by the defendants though they had not agreed on draw dates or determined who would be responsible for making the draws and providing or paying for the prizes. Approximately 3500 customers took up the offer.

Commission chair Paula Rebstock said that while a prize draw was eventually arranged by Royal Sun Alliance and Todd Energy and held in July 2002, it took place after the commission had started its investigation and communicated with the defendants about its concerns.

In the Auckland court, Judge Barbara Morris said there was “clear and considerable negligence” in failing to hold a draw in a timely fashion and that 2½ years between the launch of the scheme and the first draw was “too long”.

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