October 2013

ACCC powers up over energy companies door-to-door sales conduct

Earlier in the year, ACCC Chairman, Rod Sims identified that the “reprehensible treatment of consumers by many involved in door to door sales” would be a focus of the ACCC in 2013.

The ACCC has followed through on this pledge by recently commencing yet another set of proceedings in the Federal Court against a large energy retailer.

The energy company is alleged to have contravened the unsolicited consumer agreement provisions in the Australian Consumer Law when conducting door-to-door sales.

An unsolicited consumer agreement is a contract for the supply of goods or services to a consumer resulting from negotiations by telephone or at premises other than business premises where the salesperson was not invited and the price for the goods or services exceeds $100 or the price is not ascertainable.

Amongst other restrictions and obligations:

  • a salesperson may only call on a person for the purpose of negotiating an unsolicited consumer agreement between 9am and 6pm Monday to Friday and between 9am and 5pm on Saturdays;

  • where a salesperson calls on a person for the purpose of negotiating an unsolicited consumer agreement, the salesperson must immediately identify themselves, identify the reason for the call, and must leave the premises immediately on request; and

  • a salesperson must inform the person of their right to cancel the contract within the 10 day cooling off period.

These recently commenced proceedings come on the back of four earlier unsolicited consumer agreement proceedings against energy companies since the unsolicited consumer agreement provisions were introduced at the start of 2011, including against AGL in April when it was ordered to pay a total of $1.555 million for illegal door-to-door selling practices, and against Neighbour Energy in 2012 in which penalties totalling $850,000 were imposed.

The ACCC also uses education to address matters of concern.  In 2012, it launched its “Knock! Knock! Who’s There?” consumer awareness campaign.  The focus was to stop unfair door to door sales practices and the put the word out to consumers about their rights and ability to refuse door to door sales.  As part of the campaign 70,000 ‘Do Not Knock’ stickers, 39,000 door hangers and 16,000 consumers guides have been distributed.

The important message for businesses that engage in door to door sales is to ensure your sales team are properly trained and made aware of your disclosure and other obligations under the Australian Consumer Law, because the ACCC will crack down on you if they are not!

Bartier Perry will continue to monitor developments in this area.