Australia: Australian Competition & Consumer Commission – Australian Consumer Law – Unsolicited Consumer Agreements – Door-to-Door Sales – Energy Retailers – Do Not Knock – Reminder for Direct Selling Industry
Previously, the Australian Competition and Consumer Commission
(ACCC) announced that its objectives for 2012
included making full use of the profound changes in the
Australian Consumer Law (ACL) through
enforcement1. Consistent with its objective, the ACCC
has been enforcing compliance with the ACL, in particular, the
"unsolicited consumer agreement" (UCA)
provisions of the ACL.
On 27 March 2012, the ACCC filed two separate proceedings in the
Federal Court against three energy retailers and the marketing
companies they engaged in respect of the door-to-door sales
practices used by their salespeople.2
The ACCC's allegations include claims that the various
respondents breached the UCA provisions of the ACL because the
failed to immediately leave the premises at the request of an
failed to clearly advise the consumer:
that the salesperson's purpose was to seek the
consumer's agreement for the supply of services;
that the consumer was entitled to ask the salesperson to leave
and that the salesperson was required to leave immediately upon the
consumer's request; and
the name of the marketing company and the supplier's name
Interestingly, the proceedings will clarify whether "Do Not
Knock" notices attached to consumers' front doors
constitute a request for salespeople to leave under the UCA
provisions of the ACL – the ACCC considers that these
notices have the same effect as a consumer's verbal request to
The ACCC is seeking declarations, injunctions, pecuniary
penalties and costs. The proceedings will be heard in mid-2012.
Clearly, the ACCC has the conduct of door-to-door sellers in its
sights. In a recent Focus Paper3, we discussed the
infringement notices issued by the ACCC in respect of the conduct
of Advance Lifestyle International Retail Pty Ltd, a door-to-door
Companies should take care to ensure that their salespeople are
aware of the disclosure and other requirements when contacting
consumers to negotiate UCAs, including the following:
calling on consumers during permitted hours. Salespeople must
not visit consumers on Sundays, public holidays, before 9am or
after 6pm on weekdays, and before 9am or after 5pm on
making the required disclosures to consumers when contacting
them to discuss products or a business opportunity. Salespeople
must disclose their name, address and purpose of visit or call.
They must also inform the consumer that the salesperson is required
to leave the premises immediately upon request.
leaving the premises immediately if requested by the consumer
(and not attempt to contact the consumer for at least 30 days after
the consumer's request to leave).
making the required disclosures before the consumer signs the
sales agreement. Salespeople, for example, must inform consumers
about their right to terminate the agreement within the 10 business
day cooling-off period and the circumstances in which the
cooling-off period will be extended.
Take Home Message
The ACCC's focus on compliance with the UCA provisions of
the ACL is a timely reminder for those involved in the direct
If the UCA provisions of the ACL are applicable to the manner in
which your company procures sales, you should ensure that your
company's salesforce are aware of the requirements that apply
to regulating the way in which they approach consumers. Any failure
to inform your salesforce, if relevant, could expose your company
and you to complaints by consumers, negative media attention and
enforcement action by the ACCC.
The assistance of Mary Huang, Graduate, of Addisons in the
preparation of this article is noted and greatly appreciated.
1 See our previous
Direct Selling Legal Update 2 The first proceedings are against Neighbourhood
Energy Pty Ltd and its former marketing company Australian Green
Credits Pty Ltd. The second proceedings are against AGL Sales Pty
Ltd, AGL South Australia Pty Ltd, and their marketing company, CPM
Australia Pty Ltd. 3
http://www.addisonslawyers.com.au/knowledge/assetdoc/5a5585a669ab62ca/doc-180-accc-imposes.pdf 4 The ACCC is able to seek an order disqualifying a
person from managing a company if the Court is satisfied that the
person has contravened, attempted to contravene or has been
involved in a contravention of the UCA provisions of the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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