21 May 2013 - AGL Sales received a $1.48
million penalty plus another penalty of $70,000 against AGL South Australia following
legal action by the Australian Competition and Consumer Commission for breaching two sections of the Australian Consumer Law relating to misleading and
AGL ordered to pay $1.55 million for illegal door-to-door sales practices
21 May 2013 -
ACCC - The Federal Court has ordered by consent that AGL Sales Pty Ltd and
AGL South Australia Pty Ltd pay combined penalties of $1.555 million for illegal
door-to-door selling practices, following action by the Australian Competition
and Consumer Commission.
CPM Australia Pty Ltd, the marketing
company used by the AGL companies, was also ordered to pay $200,000 for its role
in the conduct.
“These significant penalties send a clear message to businesses that do not
adhere to their obligations under the Australian Consumer Law.
The ACCC will not hesitate to take action
to protect consumers in their homes from unscrupulous sales tactics and enforce
compliance with the laws,” ACCC Chairman Rod Sims said.
“The ACCC has previously put energy retailers on notice that it is closely
watching their use of door-to-door selling practices and the conduct of their
In September 2012, Neighbourhood Energy Pty
Ltd and Australian Green Credits Pty Ltd were ordered by consent to pay
penalties of $1 million for door-to-door sales conduct, highlighting significant
concerns regarding these sales practices in Australia.”
In summary, the Court declared that a salesperson engaged by CPM to sell
electricity and gas on behalf of AGL Sales in Victoria made false
representations and engaged in misleading and deceptive conduct during uninvited
calls on consumers.
This included conduct that was clearly designed to mislead consumers about the
salesperson’s reason for calling, such as representing that he was not there to
He also made a number of false or
misleading statements about the price of AGL’s products and consumers being
overcharged by their current supplier.
A second salesperson in South Australia
also engaged in misleading and deceptive conduct.
The Court also declared that the salespeople breached the Australian Consumer
Law (ACL) because they did not clearly advise consumers that the salesperson’s
purpose in calling on the consumer was to seek the consumer’s agreement for the
supply of electricity and gas or that they would be obliged to leave immediately
The sole contested aspect of the hearing was whether the salesperson in South
Australia broke the law by starting to negotiate despite the presence of a ‘Do
Not Knock’ sign on the consumer’s front door.
The ACL requires salespeople to leave
immediately on request of the occupier or consumer with whom they are
negotiating and the ACCC submits that a ‘Do Not Knock’ sign is such a request.
Justice Middleton has reserved his judgment on whether a request was made in
The Court ordered the companies to contribute to the ACCC’s costs and granted
other remedies to protect consumers from unlawful sales practices and to inform
them of their rights.
These include corrective advertising and
The ACCC’s action against AGL is part of a broader interest in the conduct of
energy retailers and their door-to-door sales activities.
In March 2013, the ACCC instituted
proceedings against Energy Australia and four marketing and sales companies
engaged by Energy Australia in relation to their door-to-door selling practices.
These proceedings are continuing.
The ACCC’s guide for consumers Knock! Knock! Who's There? provides information
about consumer rights, including asking a sales person to leave which they must
do when asked, or asking for time to consider the offer. The ACCC has produced a
‘Do Not Knock’ sticker to help consumers avoid unwanted door-to-door selling.
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