EnergyAustralia and its telemarketing company are being sued in the Federal Court for signing up customers and changing their power supply without their knowledge or consent.
The Australian Competition and Consumer Commission and the Australian Energy Regulator have filed separate proceedings against the energy retail giant and its telemarketing company Bright Choice, claiming they used "false, misleading and deceptive" tactics while selling electricity and gas plans over the phone.
During the calls, the telemarketers allegedly told the consumers they were not being signed up to an energy contract but would be sent information to help them make a decision about whether to sign up or not.
They also gave the impression EnergyAustralia and Bright Choice would not treat them as if they had agreed to enter into a new agreement unless they subsequently contacted EnergyAustralia to take up the offer.
Instead, according to court documents filed by the ACCC, the telemarketers hung up, submitted a successful sales report to EnergyAustralia, which in turn distributed "welcome packs", "acceptance emails", and "confirmation" documents.
If they were new customers, their electricity and gas supply was transferred to EnergyAustralia. If they were existing customers, they were switched to a new plan - without their knowledge.
The ACCC is taking action in Victoria, New South Wales and Queensland and the AER is taking action in the Australian Capital Territory and South Australia.
"Regardless of whether a salesperson is knocking on your door or calling you at home, the legal protections of the Australian Consumer Law apply," said ACCC chairman Rod Sims.
"Energy companies must act to ensure that their sales agents and representatives do not engage in unlawful sales tactics, whether they are selling door to door or telemarketing."
An EnergyAustralia spokeswoman told Fairfax Media it terminated the sales contract with Bright Choice, trading as Telechoice, in September 2013 after getting wind of the "unacceptable" behaviour and launching an internal investigation.
The two parties signed an agreement in April 2012, saying EnergyAustralia would pay Bright Choice a fee for each successful marketing attempt.
A year later, EnergyAustralia agreed to pay a bonus fee if its sales partner achieved 9000 new sales a month, over a half-year period.
The retail giant claims it took the matter to the ACCC and the AER and fully cooperated with their investigators.
"We have strengthened our compliance processes by updating compliance, training, and quality processes for all of our sales agents," the spokeswoman said. "We apologise to any customer affected."
The ACCC is basing its case on Australian Consumer Law.
The AER however will be focusing on breaches of the National Energy Retail Law, which requires retailers to obtain the explicit, informed consent of a customer to transfer him or her to a new energy retailer, or to enter the customer into a market retail contract.
"The requirement for a retailer to obtain a customer's explicit informed consent goes to the heart of consumer engagement in the energy market," said AER chair Paula Conboy.
"In order for a customer to give their explicit informed consent, a retailer or a person acting on their behalf must clearly, fully and adequately disclose all matters relevant to the customer's consent, including the purpose or use of the consent."
Both matters are listed for a directions hearing on February 13 before Justice Gordon.
In April this year, EnergyAustralia agreed to pay a penalty of $1.2 million for unlawful door-to-door selling practices.
The ACCC also took action against Neighbourhood Energy, Australian Power & Gas Company, AGL and Origin Energy in respect of door-to-door marketing conduct in 2012 and 2013.
