ACCC slaps marketing company with $750,000 fine for dodgy door-to-door sales
Monday, June 16, 2014/
The Australian Competition and Consumer Commission has slapped a marketing company with a $750,000 fine for misleading and unconscionable door-to-door sales tactics.
The watchdog started its investigation against Australian marketing company, Titan Marketing, last year, but proceedings were concluded in the Federal Court last week. The company’s director has also been banned from managing corporations for five years.
The court heard the company misled consumers while conducting door-to-door sales of first aid kits and water filters in indigenous communities and other locations across Queensland, New South Wales and the Northern Territory.
Titan Marketing was found to have made misrepresentations to consumers about the value of the first aid kits and misrepresentations about its sales representatives’ association with a community group or charity.
The court also found the company had not taken reasonable steps to ascertain whether the consumer was capable of understanding the agreement documents, including how much the goods would cost and how the consumer was to pay for the goods, and had intentionally not informed the consumer about their cooling off rights.
Titan was also found to have engaged in unconscionable conduct by using undue influence and unfair sales tactics to enter into unsolicited agreements with two individual consumers in indigenous communities.
Both consumers had limited ability to read or write English or to understand the nature of the agreements they were entering into. One of these consumers was a long-term resident in a care facility.
When the ACCC first launched its investigation, Hall and Wilcox partner Sally Scott told SmartCompany the watchdog had made an effort to pursue a number of companies over misleading and unconscionable conduct in connection with sales to those in indigenous communities.
“Issues affecting Indigenous consumers are a priority area for the ACCC,” ACCC commissioner Sarah Court said in a statement.
The court also declared Titan’s director, Paul Giovanni Okumu, was knowingly concerned in the systemic unconscionable conduct, ordering him to pay a further penalty of $50,000 and disqualifying him from managing corporations for five years.
“The substantial penalties imposed against both Titan and Okumu, as well as the five year disqualification order against Okumu, reflect the egregious nature of the conduct involved in this case, against particularly vulnerable consumers,” said Court.
The Court ordered injunctions against Titan and Okumu, which include being conditionally restrained for five years from entering Indigenous communities that require permission from Elders or Administrators to enter to sell any goods.
Titan was also ordered to pay costs of $100,000, and Okumu was ordered to pay costs of $20,000.
Titan Marketing was contacted for comment, but SmartCompany did not receive a response prior to publication.
According the ACCC website, door-to-door sellers must provide a printed sales agreement in plain, clear language and must tell consumers about their cooling off rights before they sign the agreement.
Sellers must accompany a sales agreement with a form that consumers can use to cancel the agreement during that cooling-off period.