In a warning to businesses, the Federal Court has ruled an Australian energy company and its marketing firm acted illegally when a salesperson attempted to sell to a consumer with a ‘do not knock’ sign on their door.
A salesperson from CPM Australia, acting on behalf of AGL South Australia, door-knocked on a consumer’s house where a sign was clearly displayed reading: “DO NOT KNOCK unsolicited door-to-door selling not welcome here”.
While there is no specific law regarding the existence of a ‘do not knock’ sign, TressCox Lawyers partner Alistair Little told SmartCompany it’s been viewed as the salesperson being asked to leave the premises.
“There is a specific requirement for the person doing door-to-door to leave immediately when asked to,” he says.
“They took the view that this is a clear indication that the person did not wish to have the person make a door-to-door sale under any circumstances. This meant they were immediately in breach of the legislation.”
Australian Consumer Law requires salespeople to leave immediately upon request of the consumer with whom they are negotiating.
“Businesses must respect people’s wishes in their homes,” ACCC Commissioner Sarah Court said in a statement.
“If households do not want unsolicited sellers at their door, they can convey this clearly through a prominent sign on their property and the Court’s decision means that these signs cannot be ignored.”
AGL Sale and AGL South Australia was fined a combined $1.555 million in May this year for the use of other illegal selling practices, including making false representations to consumers, and the ACCC is now seeking additional penalties.
CPM was also hit with a penalty of $200,000 for its role in the legal breaches.
The law states salespeople are only allowed to call on consumers between 9am and 6pm on Monday to Fridays and 9am to 5pm on Saturdays. It is illegal to door-knock on Sundays and public holidays.
Other obligations include they must not return to a house for at least 30 days and inform customers of the 10 day cooling off period within which they can cancel their contracts. This cooling off period can be extended if the salesperson has not provided details such as their name, company and what product they’re selling.
Little says businesses contracting another firm to manage the sales need to ensure contracts are in place to protect them should legal obligations be breached.
“The only way you make sure your salespeople are compliant is if you have a strict training program in place and you have an arrangement with the company which includes penalty provisions in case they cause you losses or damages in the event consumer laws are broken,” he says.
“If such an arrangement is in place then the contract can be terminated, and payment won’t be made should breaches occur. Businesses need to ensure the contacts you enter into are appropriately tailored to give you protection if they fail to follow through on their consumer law obligations.”
The ACCC has been cracking down on illegal door-to-door sales practices to the point where many energy companies, including Origin, have abandoned the practice.
The ACCC has also investigated Titan Marketing and Australian Power and Gas over their use of door-to-door sales tactics, specifically the targeting of vulnerable consumers this year.