Observing energy rating stars through the Australian Consumer Law lens: How volume home builders' advertising can fail consumers

Abstract

Australia builds approximately 200,000 new homes per annum, which must meet minimum energy efficiency performance requirements. One common assessment measure is the Nationwide House Energy Rating Scheme (NatHERS), in which homes are typically required to meet a 6 Star minimum. However, current advertising practices of some volume home builders are unclear as to what consumers will receive in terms of energy efficiency in their new home. This research examined the advertising practices of Australia's largest volume home builders via their organisation websites, to determine whether the advertising material and other information on their websites could breach section 18(1) of the Australian Consumer Law. The research uncovered instances of potential breaches through the use of misleading logos and language. Such representations generally implied a high performance standard is being achieved, or exceptional products are on offer – rather than simply achieving the regulatory minimum applicable to all new homes. The results indicate two primary policy implications: firstly, instead of being better informed, consumers are likely to be misled or deceived; and secondly, the use and effectiveness of the NatHERS logo is lessened through such conduct. This article provides recommendations to the Australian consumer regulator, the NatHERS administrator, and volume home builders.