If you have been targeted we want to hear from you.

Spruikers (often from the same companies that were engaged in Energy D2D sales) have been known to enrol students in courses that can cost up to $25,000. But because the courses are backed by the Government loans scheme, VET FEE-HELP, so they are marketed as “buy now, pay later” or even free! Low income consumers are targets as repayment doesn’t commence until an income threshold is reached, yet the debt remains and the taxpayer pays.

Consumer Action formally raised concerns about the marketing practices of private training providers and brokers in our recent submission to the Senate Inquiry into private vocational education and training providers in Australia, after receiving a significant number of complaints about the issue.

But in good news for consumers, things are changing. This week the Assistant Minister for Education and Training Simon Birmingham announced that he is evaluating an enrolment system to stop these colleges from enroling consumers on-the-spot.

While last month, the Federal Government announced measures will include a ban on training providers from offering inducements for enrolments, such as cash, meals, prizes and laptops. Training providers will also be required to conduct tougher assessments of students’ educational capabilities and be prevented from levying all course fees in a single transaction up front.

This is critical for consumers. High-pressure sales techniques are often used to convince consumers to enrol. Research has shown that in-home sales use psychological techniques make it very difficult for a consumer to say ‘no’ to the salesperson.[i]

Education is a life decision, not something that can be made on the door-step. Earlier this year, we exposed that only 7 per cent[ii] of students studying a VET FEE-HELP loan course online completed their studies between 2010 and 2013. The marketing practices of private colleges, including door-to-door sales have left thousands of would-be students with a big debt and nothing to show for it.

To contact Consumer Action Law Centre about your experience with Private Colleges and door-to-door sales, please contact Mick Bellairs 03 8554 6915 or campaigns@consumeraction.org.au

It’s no co-incidence that this is also the first reporting quarter since the three big retailers – AGL, EnergyAustralia, and Origin – fully implemented their commitment to voluntarily stop door to door selling.

EWOV did note that there was an increase in marketing cases about medium-sized and smaller energy retailers; this is a trend we recognised in July last year, when we noted a big increase in complaints about Simply Energy and Red Energy being made to us via the Do Not Knock website.

The lessons for energy retailers still undertaking door to door selling is clear- consumers don’t like door to door and this form of marketing generates complaints and dissatisfied consumers. We reiterate our calls for all retailers to take the lead of the big three and stop this unwanted marketing.

EWOV’s Marketing and Transfer Report: January 2014 can be accessed here.

The proceedings related to conduct which occurred in South Australia in November 2011. In this case, the sign was affixed to the consumer’s front door and contained an image of a fist knocking with a line through it and the words “DO NOT KNOCK Unsolicited door-to-door selling not welcome here”. The salesperson nonetheless knocked on the consumer’s door and attempted to negotiate an agreement to supply energy.

The Court ordered AGL SA to pay a penalty of $35,000 and CPM to pay a penalty of $25,000. The maximum penalty for each breach of the unsolicited consumer agreement provisions of the Australian Consumer Law (ACL) is $50,000.

Justice Middleton found that the conduct of the salesperson was deliberate, stating further that “the contravention subverted both the consumer’s desire not to be disturbed or interrupted by sales representatives and the very protections provided to the consumer by the legislation”. His Honour also stated that “these penalties reflect the need to deter conduct of such seriousness by the relevant Respondents and others in the door-to-door selling industry”.

“These penalties are yet another clear warning that businesses must comply with the unsolicited consumer agreement provisions of the Australian Consumer Law, which are designed to protect consumers in their own homes,” ACCC Commissioner Sarah Court said.

On 11 October 2013, the Court found that AGL SA and CPM breached the ACL by their actions, and a formal declaration has now been made to this effect.

In reaching this conclusion, Justice Middleton found that the do not knock sign conveyed a clear and unambiguous request to leave the premises without knocking on the consumer’s door.

As part of the same proceedings, Justice Middleton ordered by consent that AGL Sales Pty Ltd and AGL SA pay combined penalties of $1.555 million for other unlawful selling practices, including making false representations to consumers. CPM was also ordered to pay $200,000 for its role in the conduct.

Note: This article is the ACCC Media release “Court imposes penalties for ignoring ‘do not knock’ sign”, 13 December 2013

The Do Not Knock sicker applies to salespeople engaged in door-to-door selling. This is called an ‘unsolicited consumer agreement’ under the Australian Consumer Law, and it includes:

• when a seller, or their sales agent, approaches or calls you uninvited (ie knocks on your door) and
•  the total value of the agreement is more than $100 (or cannot be determined when the agreement is made).

You can read more about unsolicited sales agreements here.

Visits from politicians, those seeking donations for a charity, or market researchers are not unsolicited consumer agreements for the purposes of that law because there is no selling involved.  This means the Do Not Knock sticker does not apply to those visits.

Although the sticker does not apply to fundraisers or researchers, the Fundraising Institute of Australia (FIA) has information for people wishing to make a complaint about charities and fundraisers who are FIA members.  If you have a problem with a market research company that door-knocks, the Research Industry Council of Australia recommends complaining directly to the research company in question or the industry Surveyline on 1300 364 830.

For more information, read our page on who the sticker applies to. The ACCC’s consumer guide to door to door sales also has detailed information on what is and isn’t covered, and more broadly your rights at the door.

Complaints cover a range of issues—misleading claims, rudeness, door-to-door sales outside the hours permitted for selling. But most commonly the complaint involves a prominent Do Not Knock sticker being ignored.

In the week since the Federal Court decision that found the sticker to be an unambiguous request to leave the premises, we have already received complaints from seven consumers about their stickers being ignored.

Incredibly, four of those were about the one business—ABS Auto Hoppers Crossing in Victoria.  Consumers said that the ABS Auto salesperson implied the sticker didn’t apply to them as a local business, and in another case, didn’t apply to them as they weren’t an energy retailer.  One householder with a Do Not Knock Sticker claimed an ABS Auto salesperson even visited them twice in one day – and once outside the allowable hours for door to door canvassing.

Not only is it annoying for householders and potential customers, it’s potentially a very expensive business model—salespeople can be fined $10,000 and businesses $50,000 for ignoring a request to leave.  At the rate complaints are coming in about ABS Auto, it can only be a matter of time before it comes to the attention of enforcement agencies.

It’s up to businesses to know their responsibilities under the Australian Consumer Law, and we encourage consumers to let us know about any salespeople ignoring their stickers so we can pass this on to the ACCC for enforcement action.

** Since posting this warning, we’ve heard from ABS Auto, who have advised the marketing company responsible that the display of a Do Not Knock sticker is enforceable and door to door marketers must observe the wishes of the resident.  We’ll be watching with interest to see if this solves the problem in the Hoppers Crossing catchment.

Consumer Action Law Centre developed the sticker in response to the huge number of cases it was seeing where door-to-door salespeople had mislead or pressured families into deals which often left them worse off.

‘Today’s Federal Court decision sends a clear message to door-to-door salespeople across the nation – Australians have a right to enjoy their personal time without the unwanted distraction of salespeople,’ said Gerard Brody, CEO of Consumer Action.

‘The court found that the sticker “was an unambiguous request to leave the premises”. Justice Middleton found that the picture of the fist together with the words Do Not Knock were sufficient,’ said Mr Brody.

Justice Middleton said that it did not matter if a consumer does not verbally request the salesperson to leave, ‘the whole idea of a Do Not Knock Sign was to avoid confronting a salesperson, and being caught in discussion. Consumers may be vulnerable, or too polite to tell people to leave. Putting an appropriate sign on the door may be the best, or only way, to communicate the request to leave the premises.’

Consumer Action and community legal centres Australia wide have documented cases of door-to-door salespeople:

• selling to the elderly, people with dementia and people who don’t speak English,
• refusing to leave when asked,
• targeting refugee and remote indigenous communities,
• deliberately misleading consumers; and
• forging signatures as part of fraudulent sales.

Mr Body said the popularity of the sticker was a great example of what community legal centres can achieve. ‘Community legal centres have their ears to the ground and are often the first to know what businesses or industries are causing trouble. We saw salespeople taking advantage of vulnerable consumers, came up with a practical response, and have now distributed over 300,000 Do Not Knock stickers across Australia.’

‘The groundswell of support our Do Not Knock campaign received has led major energy retailers to stop door-to-door sales, it’s helped the Australian Competition and Consumer Commission (ACCC) take enforcement action and, most importantly, it has saved thousands of people from dodgy deals,’ said Mr Brody.

Consumer Action appreciates the ACCC’s efforts to clean up door-to-door sales, and congratulates its team on this success of this case.

Note
Consumers in Victoria, New South Wales, South Australia, Queensland, or the ACT can ask energy retailers to put you on a ‘no contact’ by visiting http://donotknock.org.au/no-contact/.

The Australian Competition and Consumer Commission has filed proceedings in the Federal Court against Origin Energy Retail and Origin Energy Electricity (Origin Energy), and marketing company SalesForce, in relation to their door-to-door sales practices.

“These are the fifth proceedings the ACCC has taken involving the marketing activities carried out by energy retailers at the door of consumers’ homes,” ACCC Chairman Rod Sims said.

“The ACCC alleges that SalesForce sales representatives acting on behalf of Origin Energy made numerous false and/or misleading statements to consumers and breached the Unsolicited Consumer Agreement (UCA) provisions of the Australian Consumer Law.”

“The allegations also involve several instances of unconscionable conduct as well as instances of alleged undue harassment and/or coercion by sales representatives, which the ACCC considers to be particularly serious,” Mr Sims said.

The allegations involve visits by sales representatives to the homes of thirteen different consumers across New South Wales, Victoria, Queensland and South Australia between September 2011 and December 2012.

The alleged conduct includes sales representatives making false or misleading representations:

• that there was a government requirement for the consumer to change providers to Origin;
• that the consumer had been overcharged by their current electricity provider; and/or
• that Origin had approval from, or was affiliated with, the Electricity Trust of South Australia

The UCA provisions were specifically designed to protect consumers from unscrupulous conduct in door-to-door transactions. The alleged breaches of the UCA provisions include that the sales representatives:

• failed to inform the customer of their right to cancel the contract within the 10-day cooling off period;
• called on the consumer outside permitted hours;
• failed to clearly advise the consumers that their purpose was to seek the consumer’s agreement to a supply of retail electricity and/or gas by Origin Energy; and/or
• failed to leave the consumer’s premises on request.

“The ACCC is also alleging that the sales representatives engaged in unconscionable conduct, which involved particularly vulnerable consumers who were unable to understand the agreement. It is alleged that the sales representatives in these instances employed undue pressure and/or unfair tactics in their dealings with these vulnerable consumers,” Mr Sims said.

Further, the ACCC is alleging that the sales representatives harassed and/or coerced some consumers. This includes allegations that sales representatives persistently negotiated with and pressured consumers, despite the consumer repeatedly indicating that they were not interested, as well as allegations that sales representatives coached consumers to consent to sign up with Origin during a verification call.

The ACCC is seeking pecuniary penalties, declarations, injunctions, an order for corrective notices, an order for Origin Energy and SalesForce to establish and implement compliance programs, and costs.

The ACCC’s guide for consumers Knock! Knock! Who’s There? provides information about consumer rights in relation to door-to-door marketing.

Gerard Brody, CEO of Consumer Action, said he wasn’t surprised by the allegations that APG gave false or misleading representations to prospective customers. ‘Given the hundreds of complaints our Centre has received about door-to-door sales, and what we know about the risks of commission-based selling, it’s clear that no company is immune from the problems door-to-door selling creates.’

‘Of particular concern in the APG case is the allegation that it engaged in unconscionable conduct involving a consumer with very limited English skills. Where there is a financial reward for salespeople to make a sale, then it follows that they are incentivised to use high pressure and even unfair tactics. It’s not a selling method a community minded company should be involved with’ said Gerard Brody.

Mr Brody said APG should follow the lead of Australia’s biggest energy retailers who have now turned their backs on door-to-door sales in favour of more responsible selling methods. ‘The high pressure selling and persistent nature of door-to-door sales can mean consumers buy products which may leave them paying more for electricity and gas’.

‘The simple fact is that energy contracts are complex products and it’s impossible for a customer to make a considered decision at the door. Consumers need to consider their electricity usage pattern, peak & off peak rates, impacts of pay-on-time discounts as well as cancellation fees, but door-to-door sales don’t provide this opportunity.’

Mr Brody also praised the work of the ACCC. ‘Since we launched our Do Not Knock campaign in November 2011 the ACCC has taken a keen interest in the types of cases we were seeing. Over the last year we’ve seen that interest result in some landmark court cases against energy retailers. The ACCC has certainly been proactive, and that’s a characteristic we encourage from Australian regulators.’

Energy retailers represented 60 per cent of the first 100 complaints Consumer Action Law Centre received through www.donotknock.org.au, but in this latest round of complaints that figure has dropped to around 32 per cent. Of this 32 per cent over half were complaints about Simply Energy or Red Energy.

‘We’re pleased to see a drop in complaints about energy salespeople, it’s a welcome turnaround and a testament to the fact that the three biggest retailers have announced that they’ll stop doorknocking. But the industry will struggle to regain public trust as long as companies like Simply Energy and Red Energy continue to use this high-pressure form of selling.’ said Gerard Brody, CEO of Consumer Action.

Recent complaints about Simply Energy and Red Energy include allegations that salespeople:

• refused to leave when asked;
• misled the residents about the purpose of their visit;
• door-knocked despite being listed on the retailer’s “no contact” register;
• made it seem like they were from the Government; and
• switched energy accounts over without the account holder’s permission.

‘The complaints we still hear about energy retailers are fairly typical of the door-to-door industry as a whole. You’d be amazed at the amount of salespeople that begin their spiel with “I’m not here to sell you something”. But it’s safe to say that the overwhelming majority of people who knock on your door representing a business are there to make a sale.

‘We’re about to see the introduction of flexible tariffs in the Victorian energy market which will add an extra layer of complexity to energy prices. We’d like to see retailers move to marketing methods that explain tariffs in a format that is easy to understand, and that makes comparing offers simple,’ said Mr Brody.

Consumers wishing to opt out of door-to-door energy marketing can do so by filling out Consumer Action’s ‘No Contact’ form at www.donotknock.org.au/no-contact.

Victorians can find out more about flexible pricing at www.switchon.vic.gov.au

‘This is great news for households who are sick to death of pushy energy salespeople who use high pressure sales tactics and won’t take no for an answer,’ said Gerard Brody, CEO of Consumer Action.

‘There is no doubt public sentiment is against door to door selling. It’s clear from the thousands of households that now display out Do Not Knock stickers, and the number of complaints we hear on a daily basis, that Australians would rather choose their energy supplier at a time and place of their choosing.

‘Origin is the last of the big three retailers to come to the party and Australians can now expect less interruptions at home. Now that the biggest energy retailers have finally got the message, hopefully other businesses who continue to door knock against people’s wishes will start to look at their own practices,’ said Mr Brody.

Australians who want to opt out of all door to door energy sales can fill out our ‘No Contact’ form. When you fill out the form a request is sent directly to all energy retailers telling them not to visit. Energy retailers in several states are legally required to respect a consumer’s requests for its salespeople not to visit. This online form means making that request is now quick and easy.