Contact Energy has been fined $245,000 for misleading customers in a 2017 fuel promotion.

The company, the country's second-largest energy retailer, pleaded guilty in the Wellington District Court and was convicted on seven charges under the Fair Trading Act 1986.

They related to false or misleading representations it made when it launched Fuel Rewards Plans, which offered fuel discounts with the AA Smartfuel rewards scheme, in April 2017.

The scheme replaced the firm's involvement in the Fly Buys loyalty scheme and offered discounts ranging from 10 to 50 cents per litre every month. Customers joining the one-year Fuel Rewards plan, which offered a 30-cent discount, could save up to $180 a year, the company said at the time.


The Commerce Commission, which brought the prosecution, said Contact's advertising failed to adequately disclose key information, including that the discount could be redeemed on only one fill per month and only up to a maximum of 50 litres.

The regulator considered slogans including "no tricks, no waiting, no surprises" an aggravating factor which were likely to have reassured customers that there was no other fine print or limitations that needed to be understood.

Commission chair Anna Rawlings said consumers had a right to expect businesses will be upfront and clear about their prices and discounts, so they can properly assess the benefits of signing up to an offer.

"In this case, consumers did not necessarily understand how the AA Smartfuel rewards scheme operated," she said in a statement.

"Offers to consumers need to be accurate and clear on their face, so that consumers can rely on the information they are receiving and make their decisions accordingly."