The Federal Court has ordered Origin Energy Electricity Limited (Origin) to pay $2 million in penalties in relation to unlawful door-to-door selling practices in proceedings brought by the Australian Competition and Consumer Commission. The Court also ordered Origin’s marketing company, SalesForce Australia Pty Ltd (SalesForce), to pay $325,000 in penalties.
The penalties were imposed following the Court’s findings against Origin and SalesForce of unconscionable conduct, undue harassment or coercion, false or misleading representations and breaches of the unsolicited consumer agreement provisions of the Australian Consumer Law (ACL).
“These are the highest penalties to have been ordered against an energy retailer and an individual marketing company in relation to illegal door-to-door behaviour,” ACCC Chairman Rod Sims said.
“This reflects the serious nature of the contravening conduct, including the fact that Origin and SalesForce were held to have engaged in unconscionable conduct and undue harassment or coercion.”
“The message is clear – energy companies must ensure their sales representatives do not use illegal tactics when negotiating with consumers at their door,” Mr Sims said.
The Court declared that Origin and SalesForce, through the conduct of sales representatives acting on their behalf, had engaged in a range of unlawful conduct in breach of the ACL while calling on ten consumers at their homes in New South Wales, Victoria, Queensland and South Australia to negotiate electricity contracts with Origin.
The Court held that the actions of sales representatives in two instances constituted unconscionable conduct. In one instance, the sales representative continued to negotiate with the consumer, who was a native Tamil speaker, after being advised that the consumer had difficulty understanding English. This included prompting the consumer to say ‘yes’ to questions on a phone call to confirm an electricity contract with Origin.
In the second instance, the sales representative continued to negotiate with a consumer after she informed him that she was not the authorised account holder, and repeatedly advised that she was not interested in changing her electricity retailer. During a phone call to confirm a contract with Origin, the sales representative instructed the consumer to state that her husband, who was the authorised account holder, had signed an agreement when that was not the case. This conduct was also held to constitute undue harassment or coercion.
“In each case the sales representative practised deceptions on the consumers in order to secure their custom,” her Honour Justice Katzmann stated in her judgment. “They preyed on the vulnerable and the ill-informed.”
“[The conduct] is serious, not only because of the deliberate deceptions and the exploitation of vulnerable consumers, but also because of the location and context in which the conduct occurred: at private homes to which the respondents were not invited,” Justice Katzmann said.
The Court declared that Origin and SalesForce, through the actions of sales representatives, made false or misleading representations to a number of the consumers in breach of the ACL, including that:
- there was a mistake on the consumer’s electricity bill issued by their current electricity supplier;
- the consumer had to change to Origin because of changes implemented by the government;
- the consumer would not be charged an exit fee if he changed his electricity supplier to Origin;
- the sales representative was part of a government-commissioned study investigating complaints about the cost of energy; and
- the consumer was signing an expression of interest and would not change her electricity retailer unless she contacted Origin.
The Court ordered Origin and SalesForce to jointly publish a corrective newspaper notice, maintain compliance programs and contribute to the ACCC’s costs.
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