ACCC attacks “unscrupulous industry practices” in door-to-door selling

The consumer watchdog has issued a warning about widespread unscrupulous industry practices in the door-to-door sales industry, but the industry says many of the practices raised by the ACCC have been addressed.

The Australian Competition and Consumer Commission report launched today reveals the scale and breadth of door-to-door sales, with every household in Australia door-knocked on average eight times a year, resulting in 3.1 million in 2011 with around one million of those related to energy services.

The report shows companies usually engage third-party sales agents to deliver door-to-door sales services.

Some of these reported preying on vulnerable ‘easy targets’, using false pretexts to hook consumers in such as pretending to have lost their dog, or failing to provide consumers with information on their rights as required by law.

ACCC Chairman Rod Sims said he had read too many accounts of bad, even appalling conduct for their not to be any real substance behind many of these complaints.

“The ACCC has already started a number of enforcement actions, is investigating several more and will not hesitate to take court action against companies or their sales agents who dupe consumers or don’t abide by the rules.”

Sims also warned businesses that even when they rely on third parties to perform door-to-door selling for them, they have strict obligations to consumers under the unsolicited selling provisions of the Australian Consumer Law.

The ACCC has launched a consumer guide on dealing with door-to-door salespeople which confirms it is ok to say no and to tell any seller to leave a premise.

The ACCC report also highlights how the industry’s reliance on commission-based remuneration schemes drives aggressive sales behaviour and encourages agents to adopt tactics that are not fully compliant in order to secure more sales.

The ACCC is also concerned about the varying degree of compliance training and monitoring undertaken by companies and sales agents.

The watchdog says whilst most traders and service providers reported providing training, very few sales agents interviewed possessed a sound knowledge of their legal obligations.

The report shows the four biggest industries using door-to-door sales – energy, telecommunications, solar panels and pay TV – generally see this sales channel as among the most effective for generating sales and predicts door-to-door sales are likely to increase further in Australia.

John Holloway, executive director at the Direct Selling Association of Australia, told SmartCompany some of the criticisms made in the report were unfair.

“There is no doubt there are some elements that need to be reined in, but the generalisations in the report can’t be applied across the board,” he says.

Holloway says many of the comments made about energy sellers in the report raise issues that have already been resolved.

He also says most direct selling is now done through party planning and direct marketing rather than door knocking, although some DSAA members, such as Avon, still door knock.

“It is still an accepted and growing channel for the roll out of certain products,” Holloway says.

“Parliaments around Australia have accepted the legitimacy of the channel and have put in place precautions so you can’t call outside certain hours and have to leave immediately if asked to by the consumer.”

This story first appeared on SmartCompany.