The Federal Court has ordered by consent that Australian Power and Gas pay a fine of $1.1 million for illegal door-to-door sales practices.
The penalty comes after action earlier this year by the Australian Competition and Consumer Commission, after it was revealed some sales representatives from APG made false and misleading representations to consumers.
The court found APG salespeople had told consumers that APG had approval from or was affiliated with the consumer’s existing energy retailer, was affiliated with the government or said the consumer could receive a certain discount off their energy bill by signing with APG.
The court also found one of APG’s salespeople had engaged in unconscionable conduct by targeting a foreign person with limited English reading and writing skills.
ACCC chairman Rod Sims said in a statement this is another significant result for the watchdog.
“Door-to-door sellers who use unfair sales tactics and mislead consumers into entering into agreements will face serious consequences. This is particularly the case where sellers target vulnerable or disadvantaged consumers,” Sims says.
“This outcome reinforces the message that businesses who use door-to-door marketing must ensure their practices meet the requirements of the Australian Consumer Law.”
APG is the fourth energy company to be taken to court over its door-to-door sales practices.
Earlier this year AGL Energy was order to pay $1.55 million for false and misleading representations made by its sales representatives.
The court also found APG had breached consumer laws by failing to advise consumers that their purpose was to sign up the consumer with APG.
The sales representatives also didn’t tell consumers they were obliged to leave the premises immediately on request and failed to provide information regarding their identity.
TressCox Lawyers partner Alistair Little previously told SmartCompany the strict door-knocking laws were introduced in early 2011.
“This is the ACCC flexing its muscle. It was an area subject to a lot of complaints and the ACCC had made it an area to focus on,” he says.
In the 2011-12 financial year the energy ombudsman and the ACCC received more than 3000 complaints about door-knockers.
Little says door-to-door sellers must abide by a number of regulations including only knocking between 9am and 6pm on Monday to Friday, between 9am and 5pm on Saturdays and not at all on Sundays or public holidays.
“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,” he says.
Salespeople must also not return to a residence for 30 days and inform customers of a mandatory cooling off period of 10 days where the consumer can change their mind.
The court has also ordered APG publish a corrective notice on its website and contribute to the ACCC’s costs.
While the court proceedings took place, APG was acquired by AGL Energy.