Advertising Code Appeals Tribunal Committee: Advertising of NL Energie is misleading

The Appeals Tribunal (College van Beroep, or: ‘CvB’) has also ruled in favour of Essent in the complaint it submitted against energy supplier NL Energie in mid-January.

According to the CvB, the television commercial made by NL Energie about Essent is misleading and dishonest. In the newspaper advertisement of NL Energie, the comparison with the variable tariffs of Essent is unlawful and likewise misleading. The ruling of the CvB will be brought to the attention of the general public by means of an alert.

Essent is satisfied with the upholding of the previous ruling of the Advertising Code Committee (RCC) of 18 February this year and is considering a possible claim for damages. Due to the ruling of the RCC and confirmation of the CvB, it has now become clear what is and is not permissible in comparative advertising. The CvB also indicates that customers have possibly transferred who would not have done so without the NL Energie advertisement. The CvB upholds the recommendation of the RCC to NL Energie to no longer produce advertising in this manner.

The CvB finds the breach of the advertising rules by NL Energie so serious that it wishes to bring its ruling to the attention of the general public: “The Tribunal, in view of the fact that the television commercial would create in the average consumer the – incorrect – impression that as a result of the takeover of Essent by RWE, the tariffs of Essent would or had been increased and the detrimental consequences this could have for Essent, has decided to bring this ruling to the attention of the general public.”

NL Energie has for many years made comparative advertising for variable tariffs pertaining to competitors. Essent has protested against NL Energie's most recent comparative advertising campaign and the CvB has now also ruled that it is not permissible. In mid-January, Essent submitted a complaint against the television commercial and newspaper advertisement of NL Energie.

In the television commercial, NL Energie stated that is was “the cheapest” and that consumers were paying for the takeover by RWE because the takeover costs had to be recouped. The RCC agreed with Essent that this suggestion is incorrect. The CvB has now also agreed with this. The RCC also reported that NL Energie could no longer claim on television that they are “the cheapest”.

In the newspaper advertisement, NL Energie made an incomplete and misleading comparison between its low entry tariffs and the variable basic tariffs of Essent, among others. Essent is of the opinion that NL Energie is concealing from consumers that in the comparison there is an entry tariff that is subsequently increased into a basic tariff. The consequence is that the comparison is then no longer valid and the suggested savings are absolutely not achieved. The RCC agreed with Essent and now, so does the CvB.

Furthermore, the RCC found that the claim of savings compared to Essent may not be made because the rate changes during the year. The suggested annual savings were qualified by the RCC as “incorrect information”. This opinion has now also been shared by the CvB.

In the past few weeks, NL Energie has simply continued to transmit the TV commercial and appealed against the ruling of the RCC. For certain media however, the RCC's previous ruling on 18 February was already reason to no longer transmit the TV commercial.

Essent values competition in a free energy market. Comparative advertising between providers and their tariffs is part of this. However, it must of course be done in a correct and honest manner.

Meanwhile, the Consumers' Association has also severely criticised the temporary entry tariffs of NL Energie in an article in the Consumer Magazine of March 2011: “They advertise on comparison web sites with a very low entry tariff. But this tariff does not apply to the whole term of the contract and the ordinary tariff can thereafter turn out to be substantially higher than this entry tariff. This is why the Dutch Energy Company falls outside the top 10 in contracts for an indefinite period with variable tariffs”, writes the Consumer Association.

Published: 28 March 2011