ACCC pings energy retailer over door-to-door sales practices

[box border=”full”]Lumo Energy Australia Pty Ltd (Lumo Energy) has provided a court enforceable undertaking following an Australian Competition and Consumer Commission investigation into the conduct of its door to door sales agents.[/box]

Lumo Energy is a retail supplier of energy products and a smaller player in the retail energy market. The ACCC’s investigation was prompted by consumer complaints about the sales practices of Lumo Energy’s sales agents.

The ACCC considers that Lumo Energy breached the Australian Consumer Law (ACL) at least four times in Victoria during 2012 as its sales agents did not clearly advise consumers:

  • that the sales agent’s purpose in calling on the consumer was to seek the consumers agreement to purchase energy products from Lumo Energy
  • that the sales agent would be obliged to leave the premises immediately on request, or
  • the sales agent’s name and Lumo Energy’s name and address.
  • Lumo Energy admits that by engaging in the conduct described above, it is likely to have contravened the ACL.

“The ACCC has previously put energy retailers on notice that it is closely watching their use of door to door sales. Consumer protection in the energy sector is a priority area due to the large number of complaints and the considerable detriment caused by the conduct of some salespeople at the door,” ACCC Acting Chair Delia Rickard said.

“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.”

To address the ACCC’s concerns, Lumo Energy has provided a three year court enforceable undertaking that it will comply with the relevant provisions of the ACL. In response to complaints from consumers experiencing difficulty exercising their ‘cooling off’ rights, Lumo Energy has also implemented improvements to its contract cancelation processes.

The undertaking is available on the undertakings register.

The ACCC has recently instituted proceedings against a number of energy retailers in relation to their door to door selling practices. In April, two AGL companies were ordered to pay a total of $1.555 million for illegal door-to-door selling practices, following action by the Australian Competition and Consumer Commission. CPM Australia Pty Ltd, the marketing company used by AGL, was also ordered to pay $200,000 for its role in the conduct.

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. The ACCC has also released new educational videos to help consumers respond to high pressure selling tactics. An ACCC Indigenous education film Door to Door Sales is also available.