ACCC to appeal in unfair selling case

The Australian Competition and Consumer Commission has appealed against the recent decision by Justice Jessup in the Federal Court dismissing the ACCC’s allegations that Lux Distributors Pty Ltd (Lux) engaged in unconscionable conduct in relation to the sale of vacuum cleaners to five consumers in contravention of section 51AB of the Trade Practices Act 1974 and section 21 of the Australian Consumer Law.

The ACCC had alleged that between 2009 and 2011, Lux sales representatives called upon five elderly women in their homes under the premise of a free vacuum cleaner maintenance check, and that each of the women was subjected to unfair and pressure sales tactics to induce them to purchase a current model Lux vacuum cleaner.

Justice Jessup dismissed the ACCC’s application.

The ACCC’s appeal to the Full Court of the Federal Court relates to conduct by Lux involving three of the consumers. The ACCC has appealed on the grounds that the trial judge erred in fact and law by finding that the conduct of Lux in relation to these three consumers was not, in all the circumstances, unconscionable.

As part of its appeal to the Full Court, the ACCC alleges that the circumstances of the Lux sales visits to the homes of each of these three consumers included the following:

  • the primary purpose of the home visit by the Lux representatives was to sell a Lux vacuum cleaner, but this was not disclosed to the consumers when they were contacted by a Lux representative who offered them a free maintenance check;
  • each of the three consumers was elderly and alone at the time of the attendance at their home by a Lux representative;
  • the Lux representatives who attended the homes of each of the three consumers performed a cursory maintenance check of their existing vacuum cleaners and then, using a Lux demonstration model, proceeded to conduct a test which the ACCC alleges was designed to demonstrate the inferiority of their existing vacuum cleaners to a current model Lux vacuum cleaner;
  • the Lux representatives remained in the homes of each of the three consumers for at least one and a half hours;
  • by the conclusion of the Lux representatives’ attendance at their homes, each of the three consumers had entered into an agreement to purchase a current model Lux vacuum cleaner for a price of, or exceeding, $1999, and none of them was aware that a ten day statutory cooling off period applied to their purchase.

“Unconscionable conduct is an area of priority for the ACCC, particularly where it affects vulnerable consumers,” ACCC Chairman Rod Sims said.

“We will continue to take enforcement action, including litigation where appropriate, in circumstances where the ACCC considers that companies have engaged in unconscionable conduct involving disadvantaged or vulnerable consumers, such as the elderly consumers in this case.”

A callover date has been set for 16 April 2013.

Article from the ACCC