ACCC institutes proceedings against APG for alleged false and misleading representations and unconscionable door to door sales conduct

11 September 2013

The Australian Competition and Consumer Commission has filed proceedings in the Federal Court against Australian Power & Gas Company Ltd (APG) in relation to its door-to-door selling practices.

The ACCC is alleging that APG, through the conduct of certain sales representatives acting on its behalf, made false or misleading representations while calling on consumers at their homes for the purpose of negotiating agreements for the supply of retail electricity and/or gas by APG.  The alleged conduct occurred across Queensland, New South Wales and Victoria between January and October 2011.

The ACCC also alleges that APG engaged in unconscionable conduct involving a consumer from a non-English speaking background with very limited English reading/writing skills. 

“These are the fourth proceedings that the ACCC has instituted as part of its focus on door-to-door selling practices in the energy industry, and the first to include an allegation of unconscionable conduct,” ACCC Chairman Rod Sims said.

“Businesses who use door-to-door marketing must ensure their practices meet the requirements of the Australian Consumer Law. The ACCC will not hesitate 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 alleges that sales representatives acting on behalf of APG made false or misleading representations including that:

  • APG had approval from, or was affiliated with, the consumer’s current energy retailer or distributor;
  • APG had approval from, or was affiliated with, government; and
  • the consumer could receive a certain discount off their energy bill by agreeing to receive supply of retail energy from APG, when APG did not offer such a discount.

The ACCC also alleges that APG breached various Unsolicited Consumer Agreement provisions of the Australian Consumer Law, which are designed to protect the rights of consumers in door-to-door transactions.  These alleged breaches include that the sales representatives:

  • failed to clearly advise the consumers that their purpose was to seek the consumer’s agreement to a supply of retail electricity and/or gas by APG;
  • failed to advise the consumers that the representatives were obliged to leave the premises immediately on request; and
  • failed to provide information relating to their identity.

The ACCC is seeking:

  • declarations;
  • pecuniary penalties;
  • an order for corrective newspaper and website notices;
  • an order for APG to establish and implement a compliance program; and
  • costs.

The matter has been filed in the Federal Court in Brisbane.  The first directions hearing is listed for 18 October 2013.

Background

In May 2013, AGL Sales Pty Ltd and AGL South Australia Pty Ltd were ordered to pay penalties totalling $1.55 million by consent for false and misleading representations and breaches of the unsolicited consumer agreements provisions.  Marketing company CPM Australia Pty Ltd was ordered to pay $200,000 for its role in the conduct.

In March 2013, the ACCC instituted proceedings against EnergyAustralia Pty Ltd (formerly TRUenergy Pty Ltd) and four marketing and sales companies engaged by EnergyAustralia in relation to alleged false and misleading conduct during their door-to-door selling practices.  These proceedings are continuing.

In September 2012, the Federal Court ordered Neighbourhood Energy and its former marketing company Australian Green Credits Pty Ltd to pay total penalties of $1 million by consent for illegal door-to-door selling practices.

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.

Release number: 
202/13
ACCC Infocentre: 

Use this form to make a general enquiry.

Tags

Audience