Meridian Energy offshoot Powershop's foray into the Bay of Plenty is being curbed by an Advertising Standards Authority ruling finding the power company used false advertising.

A Powershop advertisement claiming it is cheaper than Trustpower has been ruled misleading by the Advertising Standards Authority.

ASA has ruled a Powershop advertisement referring to Trustpower customers is misleading.

The Authority's complaint's board says the advertisement printed in APN paper, the Bay of Plenty Times, is likely to mislead consumers as it contains inadequately substantiated, and in some cases inaccurate, claims which create a false overall impression that Powershop is cheaper than Trustpower.

The panel says the advertisement exploits consumer's trust by not appropriately applying, or describing the parameters of the test on which the claims were based.

In its complaint, Trustpower says the advertisement for Powershop was specific and targeted at a Tauranga Trustpower customer, who had just received their TECT (Tauranga Energy Consumer Trust) rebate.

The complaints board agrees that Powershop's assertion that ' even when you subtract the (TECT) rebate the average Trustpower household still pays more for power than the average Powershop customer” is simply not correct.

The advertisement made an absolute claim and the application of the Ministry of Business Innovation and Employment's Quarterly Survey of Domestic Electricity Prices as a qualifier for the statement in the advertisement was flawed, incorrect, and likely to mislead, says Trustpower's General Manager Commercial Operations, Chris O'Hara.

'While it is fine for retailers to compete for customers on the basis of price and customer service, it is unacceptable for one retailer to make misleading claims at the expense of another,” says Chris.

'The MBIE Survey is a monitoring tool and was never intended as a basis for competing power companies to make price comparisons in offers to customers.

'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.”