Amaysim shares are getting beaten up after accusations of 'misleading' discounts

Daniel Maurer/AFP/Getty Images
  • Mobile phone player Amaysim is in the Federal Court accused of making false or misleading marketing claims about discounts and savings.
  • The ACCC alleges the company’s subsidiary, Click Energy, represented to consumers in Victoria and Queensland that they could get discounts on energy charges if they paid their bills on time.
  • Amaysim says it has acted lawfully, ethically and in accordance with industry practice.

Shares in mobile phone and broadband player Amaysim fell hard after confirming that the consumer watchdog the ACCC (Australian Competition and Consumer Commission) has started proceedings against it in the Federal Court.

At the close, the shares were down 10.3% to $0.915.

The ACCC alleges the company’s Amaysim Energy, trading as Click Energy, made false or misleading marketing claims about discounts and savings that Victorian and Queensland customers could obtain.

Click Energy, between October 2017 and March this year, allegedly represented to consumers in Victoria and Queensland that they could get discounts of between 7% and 29% off if they paid their bills on time.

Here are the advertisements by Click Energy, according to the ACCC:

Supplied

The mobile sim card company last year launched itself as a energy utility with no lock-in contracts and discounts which don’t expire, buying Click Energy, an online pure-play energy seller, for $120 million.

Today, amaysim says it takes its obligations under Australian Consumer Law seriously and has appropriate processes in place to ensure compliance.

“The company rejects the claims being made by the ACCC and believes it has acted lawfully, ethically and in accordance with industry practice,” the company says.

“The ACCC’s allegations relate to legacy Click Energy products which are no longer offered to the public.”

Click Energy has since reviewed and improved its statements regarding discounts and savings and amended its product descriptions.

Amaysim is forecasting net revenue in the full 2018 year of between $573 million and $583 million.

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