The Federal Court has ordered Lux Distributors pay pecuniary penalties totalling $370,000 for engaging in unconscionable conduct, in proceedings brought by the Australian Competition and Consumer Commission.
The Court’s orders follow declarations by the Full Court of the Federal Court in August 2013 that Lux had engaged in unconscionable conduct when selling vacuum cleaners to three elderly women.
The sales occurred after a Lux sales representative called on the women in their homes under the premise of a free vacuum cleaner maintenance check, but with the purpose of selling a vacuum cleaner. The women were then subjected to unfair sales tactics, and pressured into purchasing a vacuum cleaner.
“The substantial penalties imposed against Lux reflect the nature of the breaches, which involved taking advantage of a “deliberate ruse” to gain access to consumers’ homes and then engaging in pressure sales tactics so that these vulnerable consumers agreed to make a purchase,” ACCC Commissioner Sarah Court said.
“The Full Court noted in its judgment in 2013 that consumer protection laws reinforce societal values and expectations that consumers will be dealt with honestly and fairly, and without deception.”
“As the national consumer protection regulator, consumer protection issues that affect vulnerable members of the community and unconscionable conduct are priority areas for the ACCC,” Ms Court said.
The Court also made orders for injunctions preventing Lux from engaging in similar conduct in the future and requiring the establishment of a compliance and education program for all Lux employees and its agents.