ACCC alleges misleading and unconscionable door-to-door sales conduct

17 June 2013

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Titan Marketing Pty Ltd (Titan) and its sole director, Mr Paul Giovanni Okumu.

The ACCC alleges that Titan representatives engaged in misleading and unconscionable conduct when conducting door-to-door sales of first aid kits and water filters in Indigenous communities and other locations in Queensland, New South Wales and the Northern Territory.  The allegations relate to conduct occurring since January 2011.

The ACCC also alleges that Titan:

  • contravened the unsolicited consumer agreement provisions of the Australian Consumer Law
  • made false or misleading representations in relation to Titan’s affiliation with a charity group, consumers’ refund rights and the value of the goods supplied by Titan
  • entered into contracts with consumers which contained an unfair contract term, which gave Titan the right to automatically debit the whole of the remaining contract amount from the consumer’s bank account or credit card if the consumer missed a single payment.

ACCC Chairman Rod Sims said, “Indigenous consumer protection is a priority area for the ACCC.”

“The allegations against Titan include alleged conduct which took place in Indigenous communities, where some consumers were particularly vulnerable and did not understand the contract documents.  The ACCC will continue to take action to protect consumers in their homes from misleading and unconscionable conduct, particularly where the conduct affects disadvantaged or vulnerable consumers.”

The ACCC is seeking interlocutory orders against Titan in relation to its activities in Indigenous communities.  The ACCC’s application for interlocutory orders will be heard in the Federal Court in Brisbane on 24 June 2013.

The ACCC is also seeking declarations, injunctions, pecuniary penalties, a community service order and costs.  

The ACCC would like to acknowledge the assistance of the Indigenous Consumer Assistance Network (ICAN) with the ACCC’s dealings with affected Indigenous consumers.

Background

The ACCC gives enforcement priority to matters involving a range of factors, including conduct detrimentally affecting disadvantaged or vulnerable consumers.  The ACCC is currently prioritising its work in relation to consumer protection issues impacting on Indigenous consumers. 

  • On 22 April 2013 the Federal Court found that Excite Mobile Pty Ltd engaged in false and misleading and unconscionable conduct in its provision of mobile phone services to customers across all parts of Australia, including consumers living in Indigenous communities on the Cape York Peninsula, remote areas in Queensland and Western Australia, and throughout the Northern Territory.  A penalty hearing is scheduled for 30 August 2013.

The ACCC’s action against Titan is also part of a focus on door-to-door sales activities.  The ACCC has recently instituted proceedings against a number of energy retailers in relation to their door to door selling practices. 

  • In April, two AGL companies were ordered to pay a total of $1.555 million for illegal door-to-door selling practices, following action by the Australian Competition and Consumer Commission. CPM Australia Pty Ltd, the marketing company used by AGL, was also ordered to pay $200,000 for its role in the conduct.

The ACCC’s guide for consumers ‘Knock! Knock! Who's There?’ provides information about consumer rights, including asking a sales person to leave which they must do when asked, or asking for time to consider the offer.

The ACCC has produced a ‘Do Not Knock’ sticker to help consumers avoid unwanted door-to-door selling.

The ACCC has also released new educational videos to help consumers respond to high pressure selling tactics.

An ACCC Indigenous education film Door to Door Sales  is also available.

Release number: 
127/13
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