Energy Australia fined for door knocking

ACCC action to clamp down on illegal practices results in million dollar fine.
 
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01.ACCC continues door-knocking clampdown

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Energy Australia has been slapped with a $1.2 million penalty in Federal Court for illegal door-to-door selling practices. The legal action was the latest in a run of cases brought by the ACCC.

According to the regulator, the court found that the energy giant's sales force “made false and misleading representations and engaged in misleading and deceptive conduct".

Another $290,000 in fines was levied against three marketing companies that Energy Australia contracted to hire and train the door knockers. 

The ACCC has now moved to re-authorise an industry code of practice for door-to-door energy sales. 

Dodgy sales tactics

In seeking to close a sale, the Energy Australia door knockers often resorted to outright fabrication. The sales tactics included: 

  • Sales reps telling consumers they were part of a government initiative to make sure energy companies were charging the correct rate.
  • Telling consumers they would become eligible for additional government entitlements if they changed to Energy Australia.
  • Telling consumers their current retailer was charging more that the mandated electricity rate.

In violation of consumer law, door knockers also failed make clear that they were salespeople representing Energy Australia and had to leave the premises if asked. Some also ignored “do not knock” signs. 

The latest win

The ACCC is currently pursuing a case against AGL and Origin Energy for illegal door-to-door sales practices. In May 2013, AGL Sales was ordered to pay $1.5 million in fines and the marketing company it contracted, CPM Australia Pty Ltd, was ordered to pay $200,000. 

An August 2012 CHOICE investigation revealed that CPM was advertising for “residential field sales agents” to sell energy products at $18 per hour plus “uncapped commissions” and a chance for weekly and monthly bonuses based on sales. 

CPM said applicants need only learn some “simple procedures and selling techniques” and would be carted around neighbourhoods in a company van. Backpackers “fluent in English” were invited to apply.

According to the ACCC, one million door-knocking energy sales were attempted across Australia in 2011, usually by external marketing companies. 

It estimated at the time that Australians experienced an average of eight door knocks per year, with residents in NSW and Victoria likely to experience more than the average. 

Both AGL and Energy Australia have since shelved their door knocking campaigns. 

 
 

 

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