In early September 2011, the ACCC accepted a court enforceable
undertaking from a door-to-door sales company and one of its former
salespeople in respect of misleading and deceptive conduct and the
making of false representations. This followed a number of
complaints from elderly consumers.
Infringement notices totalling $19,800 were also imposed and the
company was required to implement a trade practices law compliance
program and publish corrective notices.
This matter is a timely reminder to all direct selling
organisations (DSOs) that they are responsible for
representations made by their independent salesforce.
Advanced Lifestyle International Retail Pty Ltd
(ALI) promotes and sells a range of vibrating
massage products which are incorporated into cushions, wands,
chairs and beds (the Products). Products
were sold during presentations made by ALI's salesforce to
consumers in their homes. ALI obtained invitations to
consumers' homes predominantly by approaching potential
customers by phone or in shopping centres and advising them that
ALI was offering an in-home massage or therapy treatment at no
cost. ALI's customers were primarily senior citizens.
During 2010, representations were made by ALI's salesforce
to consumers during in-home presentations for the Products.
Undertaking to the ACCC
ALI's undertaking to the ACCC acknowledged that
representations made by ALI and one of its salespeople were
misleading, deceptive or false because:
ALI's real purpose in seeking an invitation to homes was to
sell the Products.
The Products did not have Government sponsorship or approval,
as had been represented.
The actual prices of the Products were more expensive than the
The customers were told that they did not have a right to
cancel the sales agreement within a cooling-off period. (This was
clearly not a correct statement of the rights available under the
applicable Queensland Fair Trading Act (1989) at the
Take Home Points
Rod Sims, the ACCC Chairman, noted that this matter highlighted
"Businesses that engage in door-to-door sales must be
In this regard, businesses involved in direct selling must be
vigilant and ensure that their independent salesforce are trained
properly and are aware fully of the representations which can be
made validly in respect of the goods and/or services of the
businesses which they promote. Salespeople should also be aware of
the requirements under the new unsolicited consumer agreement
provisions in the Australian Consumer Law which require
consumers to be informed of certain rights at the time a sale is
made, including the right to terminate the sales agreement during
the cooling-off period.
DSOs should also inform their salesforce that their activities
may be monitored not just by the ACCC but also by other regulators,
such as the Therapeutic Goods Administration.
Finally, DSOs should ensure that their independent salesforce
are aware of these matters because, if there is any consumer
complaint or regulatory action, it will be the business that will
be held responsible.
Published:17 October 2011
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