ACCC targets door-to-door sales tactics

8 March 2013

The Australian Competition and Consumer Commission has filed proceedings in the Federal Court of Australia against EnergyAustralia Pty Ltd (formerly TRUenergy Pty Ltd) and four marketing and sales companies engaged by Energy Australia in relation to their door-to-door selling practices. 

The marketing companies are Sales Marketing and Real Technologies – SMART Pty Ltd, Aegis Services Australia Pty Ltd, Multiple Stories Pty Ltd (trading as Aegis Direct) and Australian Sales and Promotions Pty Ltd.

The ACCC is alleging that Energy Australia and these marketing companies, through the conduct of certain sales representatives engaged by them or acting on their behalf, made false, misleading or deceptive representations while calling on consumers at their homes for the purpose of negotiating agreements for the supply of retail electricity and/or gas by Energy Australia. The ACCC alleges this conduct occurred variously across Victoria, New South Wales and Queensland between July 2011 and August 2012.

“These are the third proceedings that the ACCC has instituted against an energy retail company in the past 12 months for similar conduct, highlighting significant concerns regarding door-to-door selling practices in Australia,” ACCC Chairman Rod Sims said.

“The ACCC has previously put energy retailers on notice that it is closely watching their use of door-to-door selling practices and the conduct of their door-to-door salespeople. The ACCC will not hesitate to take action to enforce compliance with the laws that are specifically designed to protect consumers in this area.”

“Businesses should be aware that even when they rely on agents or other third parties to perform door to door selling for them, they have strict obligations to consumers under the unsolicited selling provisions of the Australian Consumer Law,” Mr Sims said.

The ACCC alleges that these sales representatives made false, misleading or deceptive representations that:

  • there was a mandated electricity rate or tariff that retail electricity consumers were required to be charged by their electricity retailers;
  • Energy Australia’s sales representatives had sponsorship, approval or affiliation with the government; and
  • the Energy Australia rate or tariff had a sponsorship, approval or affiliation with the government which the tariff being charged by the consumer’s existing supplier of retail electricity and/or gas did not have. 

The ACCC also alleges that Energy Australia and three of the four marketing companies breached various provisions of Division 2 of the Australian Consumer Law, which is 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 Energy Australia;
  • 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,

as required by the Australian Consumer Law in relation to unsolicited consumer agreements.

Also alleged in the proceedings is one instance of a sales representative failing to immediately leave the premises at the request of an occupier, as required by the Australian Consumer Law. The ACCC contends that the occupier made this request by displaying a ‘do not knock’ notice next to their front door.   

The ACCC notes that on 25 February 2013, Energy Australia announced that it had decided to cease door to door marketing by the end of March 2013.

Background

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

Also in March 2012, the ACCC took action against AGL Sales Pty Ltd and AGL South Australia Pty Ltd, and marketing company CPM Australia Pty Ltd, alleging that the companies engaged in misleading and deceptive conduct. These proceedings are continuing.

Release number: 
48-13
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