The Federal Court has found failed utility broker Energy Watch and its former chief executive Ben Polis made false and misleading representations in advertising campaigns and ordered payment by Energy Watch of $1.95 million.
The penalty against Energy Watch was the full amount sought by the Australian Competition and Consumer Commission although, as Energy Watch is now in liquidation, it is unlikely the huge fine will ever be paid.
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“The Australian people have been misled and deceived by the sharp business practices engaged in by Energy Watch and Mr Polis and they would rightly expect that such conduct not be treated lightly by the court,” Justice Marshall found.
In his judgment, Marshall described energy prices as “a matter of public interest” and said Energy Watch’s advertising campaign was “virtually inescapable”.
“It was extremely difficult to be a Melburnian and not be aware of Energy Watch and its advertising claims,” Marshall said.
Marshall said Energy Watch was a medium-sized company with “large cash flows” during the advertising campaign.
“It is important to stress that Energy Watch should not be published as if it had been a small business,” he found.
Marshall also said the Court should not be deterred by Energy Watch’s liquidation.
“It does not matter that the $1.95 million penalty which the Court will impose on Energy Watch will never be paid.
“The penalty will serve as a warning to all business people who engage in energy brokering services, not to replicate the conduct recorded in declarations.”
Marshall found Polis also needed to be made personally responsible as “the public face of Energy Watch” and so imposed a $65,000 penalty on the former chief executive.
The ACCC had sought a penalty of $100,000.
“His personal endorsement in the radio advertisements, which in many broadcasts may fairly be described as high pressure salesmanship was significant,” Marshall found.
Marshall accepted that Polis is currently suffering financial hardship, but said “I have no doubt he will recover from that situation”.
“He is young, intelligent and energetic. He has already recovered from two previous failed business ventures,” he found.
Polis spoke to Smart Company ahead of today’s judgment and claimed he is the victim of a vendetta by energy retailers, disgruntled former employees and the ACCC.
This story first appeared on SmartCompany.