ACCC cracks down on door to door sales practices

The Australian Competition and Consumer Commission today launched a research report on the door to door sales industry and new, practical tools to help consumers manage this problematic sales approach.

The report, Research into the door to door sales industry in Australia, is the first report into the industry, and reveals its scale and breadth. In 2011 over 1.3 million sales were conducted through this sales channel and of these, approximately 1 million sales related to energy services.

The report shows companies usually engage third party sales agents to deliver door to door sales services. Some of these reported preying on vulnerable ‘easy targets’, using false pretexts to hook consumers in such as pretending to have lost their dog, or failing to provide consumers with information on their rights as required by law.

ACCC Chairman Rod Sims said, “Every household in Australia is door knocked on average eight times a year and this report confirms the ACCC’s concerns about widespread, unscrupulous industry practices.

“In September 2011 I placed the industry on notice when I said at the ACOSS & Choice Energy at Home Forum that I had read too many accounts of bad, even appalling conduct for there not to be any real substance behind many of these complaints. The ACCC has already started a number of enforcement actions, are investigating several more and will not hesitate to take court action against companies or their sales agents who dupe consumers or don’t abide by the rules.”

Mr Sims also warned businesses that even when they rely on 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’s new consumer guide on dealing with door to door sales people highlights that it is ok to say no and to tell any door to door seller to leave your premises.

The Knock! Knock! Who’s There? guide gives consumers information about  their rights, including asking a sales person to leave, which they must do, or asking for time to consider the offer.

“You do not have to agree to anything on the spot, and if you do you can change your mind and cancel the contract during the cooling off period,” Mr Sims said.

“You can contact the ACCC and request a sticker for your front door or front gate which lets sales people know that you do not want them to knock on the door. We can also provide you with a door hanger to remind you of your rights as you answer the door,” he said.

The report also highlights how the industry’s reliance on commission-based remuneration schemes drives aggressive sales behaviour and encourages agents to adopt tactics that are not fully compliant in order to secure more sales.

Also of concern is the varying degree of compliance training and monitoring undertaken by companies and sales agents. Whilst most traders and service providers reported providing training, very few sales agents interviewed possessed a sound knowledge of their legal obligations.

The report shows the four biggest industries using door to door sales –energy, telecommunications, solar panels and pay TV – generally see this sales channel as among the most effective for generating sales.  The door to door sales industry has historically been the subject of a high number of complaints to the ACCC. It predicts door to door sales are likely to increase in Australia.