The Advertising Standards Authority (ASA) has ruled that Meridian subsidiary Powershop misled consumers with an advertisement claiming it was cheaper than Trustpower.
Trustpower laid the complaint after Powershop ran an ad in the Bay of Plenty Times which contained the headline, "Trustpower isn't being generous, Tauranga. You are."
The advertisement said "even when you subtract the rebate the average Trustpower household still pays more for power than the average Powershop customer". The ad was targeted at Tauranga Trustpower customers, who had just received their TECT (Tauranga Energy Consumer Trust) rebate.
An asterisk qualified the statement using Ministry of Business, Innovation and Employment statistics.
An ASA panel which reviewed the complaint said the advertisement was flawed, incorrect and likely to mislead consumers as it contained inadequately substantiated and in some cases inaccurate claims.
The panel said the advertisement also exploited consumers' trust by not appropriately applying or describing the parameters of a test on which the claims were based.
Trustpower spokesman Chris O'Hara said while it was fine for retailers to compete for customers on the basis of price and customer service, it was unacceptable for one retailer to make misleading claims at the expense of another.
"Companies need to be very careful that they do their homework, and make sure the claims they make are correct.
"Hopefully Powershop will try harder in future," he said.
- Fairfax Media