ACCC court action against energy retailers’ door-to-door sales tactics

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The Australian Competition and Consumer Commission has filed proceedings against three energy retailers and the marketing companies engaged by them in relation to their door-to-door selling practices.

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 has stated that it will not hesitate to take swift action to enforce compliance with the laws that are specifically designed to protect consumers in this area.

The ACCC instituted proceedings in the Federal Court of Australia against AGL Sales Pty Ltd, AGL South Australia Pty Ltd, and marketing company CPM Australia Pty Ltd.

The ACCC has also instituted separate proceedings against Neighbourhood Energy Pty Ltd (which is part of the Alinta group) and its former marketing company Australian Green Credits Pty Ltd.

The ACCC alleges that the each of the respondents engaged in misleading and deceptive conduct, and that AGL Sales and CPM Australia made a range of false representations to consumers in the course of door-to-door selling.

The proceedings also allege contraventions of Division 2 of the Australian Consumer Law which is designed to protect the rights of consumers in door-to-door transactions. These provisions came into force on 1 January 2011.

With the exception of AGL Sales, the ACCC alleges that each of the respondents breached the Australian Consumer Law by failing to immediately leave the premises at the request of an occupier. The ACCC contends that consumers requested the salespeople to leave by placing a ‘do not knock’ sign on their door.

It is further alleged that by the conduct of their salespeople, each of the respondents breached the ACL because their salespeople did not clearly advise the consumer, at all or before starting to negotiate:

  • that the dealer’s purpose was to seek the person’s agreement for the supply of services
  • that the dealer would be obliged to leave immediately upon request, and
  • the name of the marketing company and the name and address of the supplier of the services being offered.

The ACCC is seeking:

  • declarations
  • injunctions
  • pecuniary penalties, and
  • costs.

Both matters have been filed in the Federal Court’s Fast Track List.  Scheduling conferences are listed at:

  • 10:15 AM on 25 May 2012 before Justice Marshall (Neighbourhood Energy and Australian Green Credits), and
  • 10:15 AM on 1 June 2012 before Justice Middleton (AGL Sales, AGL South Australia and CPM Australia.)

As part of the ACCC’s ongoing work in this area, the ACCC and the Australian Energy Regulator have recently signed agreements with State and Territory energy ombudsmen that will allow greater scrutiny of dubious door-to-door marketing of energy products.