The Australian Competition and Consumer Commission is continuing its crackdown on door-to-door sales, with energy company Australian Power & Gas the latest business to be taken to court.
The ACCC is alleging sales representatives working on behalf of APG made false and misleading representations while negotiating with consumers in their homes.
The door-knockers are also alleged to have engaged in unconscionable conduct involving consumers with limited English skills from a non-English speaking background.
APG is in the process of being purchased by AGL Energy.
APG is the fourth business to be taken to court over its door-to-door sales tactics.
TressCox Lawyers partner Alistair Little told SmartCompany the strict door-knocking “regime” was introduced to the Australian Consumer Act in early 2011 and has resulted in tougher penalties.
“This is the ACCC flexing its muscle. It was an area subject to a lot of complaints and the ACCC has made it an area to focus on.”
Little says the complaints largely focused on the use of high-pressure sales tactics and salespeople selling to the elderly or people who spoke poor English, but the new legislation was designed to address this.
“In short, what the legislation says is salespeople can’t call on consumers except between 9am and 6pm Monday to Friday and 9am and 5pm on Saturdays,” he says.
“When a person does call at someone’s house they have to say what the purpose of the call is and provide info about who they are and what company they work for, and they are obliged to tell consumers that, if requested they leave, they must leave immediately.”
Other obligations include if a salesperson is asked to leave, they must not return for at least 30 days and they must inform consumers of the mandatory cooling-off period for all new contracts wherein they have 10 business days to change their mind and cancel the contract without penalty.
The ACCC is claiming APG breached its legal obligations when its salespeople led consumers to believe they had approval from, or were affiliated with, the consumer’s current energy retailer or the government.
The salespeople are also alleged to have promised discounts on energy bills when they did not exist and failed to meet a number of their obligations under Australian Consumer Law.
APG said in a statement it has been working to improve its door-to-door sales standards.
“We have been working with the ACCC with respect to these issues. To the extent that there are consumers that have been adversely affected, we are striving to ensure the customers get a positive experience from door-to-door sales,” APG chief executive James Myatt says.
“APK’s [APG] door-to-door sales channel has been a major driver of customer growth for the company. The channel does, however, have some inherent risks.”
Proceedings are due to start in the Brisbane Federal Court on October 18.
In September 2012, the Federal Court ordered Neighbourhood Energy and its former marketing company to pay penalties totalling $1 million for illegal door-knocking practices.
In May this year AGL was ordered to pay penalties of $1.55 million for false and misleading representations made through its sales representatives.