Free online trials and surveys that capture your details are both forms of lead generation, which is a main springboard for unsolicited selling
A new report from the ACCC reveals that unsolicited selling by cold callers, door knockers and salespeople in shopping centres and other public places is widespread
The Consumer Action Law Centre has called for a total ban on the practice, but the ACCC didn’t go that far in its report
Any time you enter your name and contact details into a form on a website you could be setting yourself up for an unasked-for round of pressure selling by a cold caller or door knocker. In fact, that’s what these forms are often set up for.
Personal information gathered through price comparison websites, online quotes, free trials, surveys or other online enticements often ends up in the hands of data brokers, who then sell your information to commission-driven salespeople.
Cold callers and door knockers frequently resort to misleading conduct to close the deal
More often than not, they’re out to sell you a solar system or other energy device and they’ll include financing options, especially through buy now, pay later platforms that they have a commercial relationship with.
The free trials and surveys are forms of lead generation, which is a main springboard for unsolicited selling. The salespeople who chase down these leads can convince people to make financial transactions they weren’t planning on and can’t really afford. As the salesperson’s spirited spiel fades into the background, many end up regretting the purchase.
It doesn’t help that the cold callers and door knockers frequently resort to misleading conduct to close the deal, including not being truthful about the full cost of the purchase.
A new report on this longstanding issue from the Australian Competition and Consumer Commission (ACCC) reveals that around three-quarters of Australians have been subject to an unsolicited selling attempt over the phone in the previous two years, and over a quarter made at least one purchase (including from door knockers and salespeople in shopping centres and other public places).
The report “shows how consumers are being exposed to unsolicited sales practices that place them at financial and psychological risk, particularly consumers experiencing vulnerability or disadvantage,” says ACCC deputy chair Catriona Lowe, adding that the research “demonstrates widespread non-compliance with existing rules by businesses and salespeople who engage in unsolicited selling. It is clear that change is needed”.
Consumers are being exposed to unsolicited sales practices that place them at financial and psychological risk, particularly consumers experiencing vulnerability or disadvantage
ACCC deputy chair Catriona Lowe
The ACCC investigation follows a designated or “super” complaint about unsolicited selling lodged by the Consumer Action Law Centre (Consumer Action) in March last year.
The complaint called for wholesale change in the form of a total ban on the practice, but the ACCC didn’t go that far in its report. Consumer Action CEO Stephanie Tonkin says the unsolicited selling industry has gotten off too easily.
Unsolicited selling often involves the sale of solar systems purchased through buy now, pay later platforms.
“The ACCC has called out the dodgy practices evidenced in our complaint and dozens of submissions to the review, including high-pressure sales tactics and salespeople failing basic legal obligations like providing a contract or advising of cooling-off periods,” Tonkin says.
“Yet the pages of compelling findings on consumer shame, financial and psychological harm and most consumers seeing ‘limited value of unsolicited selling’, are hard to reconcile with the lukewarm reforms proposed.”
No ban, just higher penalties for salespeople who break rules
Instead of a ban, the ACCC has recommended higher penalties for salespeople who violate the rules that govern unsolicited selling. Common violations include ignoring do-not-knock stickers on people’s homes, not making clear that the resident can ask them to leave at any time, and failing to provide a sales agreement that details how target customers can terminate a deal after they’ve signed up.
These reforms add complexity to laws that the ACCC points out aren’t working and will fail to stop the harms described throughout the report
Consumer Action CEO Stephanie Tonkin
The ACCC also proposes a system in which cold-callers can make contact but then have to wait a prescribed (but not yet specified) number of days for the prospective customer to follow up, during which time the salesperson can’t initiate further contact.
“These reforms add complexity to laws that the ACCC points out aren’t working and will fail to stop the harms described throughout the report,” Tonkin says.
Claire Ohk, manager of consumer advocacy at Energy Consumers Australia, says unqualified salespeople hawking solar systems to unsuspecting customers “undermines the consumer trust that is essential for a successful energy transition”.
“The current market continues to force consumers to navigate high-risk decisions without adequate protections. We need to shift the responsibility onto the providers by introducing a consumer duty that requires energy providers to actively deliver fair outcomes and avoid foreseeable consumer harm.”
The consumer duty would require solar system providers “to act in consumers’ interests, alongside expanding ombudsman jurisdiction to cover consumer energy resources so every household has access to independent dispute resolution when things go wrong,” Ohk says.
The regulator has recommended allowing unsolicited selling to continue for now, but Consumer Action’s call for a ban may yet come to pass
The regulator has recommended allowing unsolicited selling to continue for now, but Consumer Action’s call for a ban may yet come to pass.
The ACCC’s Catriona Lowe says the agency’s recommended reform “preserves the selling channel for the minority of consumers who value it. We have also recommended that the effectiveness of the recommended measures is subject to review within two years of implementation to see if compliance and outcomes have improved”.
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Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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