Australia: Door-to-Door Sales Update – Do Not Knock Register Bill 2012 – Knocked Out?
Direct Selling Legal Update

As discussed in a previous Focus Paper, Federal Labor MP, Steve Georganas introduced a private member’s bill in the Federal House of Representatives to establish a Do Not Knock Register (the Register) ¹ . The Do Not Knock Register Bill 2012 (the Bill) proposed to prohibit sales people from making marketing visits to residential and government addresses listed on the Register.

However, the Bill is unlikely to progress, at least in its current form. In a report dated 11 September 2012 ² , the House of Representatives Standing Committee on Social Policy and Legal Affairs (the Committee) recommended that the Bill not be supported. The Committee is of the opinion that there are not sufficient policy reasons for the Bill. Further, the Committee considered:

• that it is not clear the Bill is needed to protect vulnerable members of the community given the significant consumer protections which are contained in Australian Consumer Law (ACL);
• that some of the language and terms used in the Bill are inconsistent with the purpose of the Bill (or are not sufficiently tailored for its purpose); and
• the absence of adequate funding to support the Bill.

Addisons will continue to closely monitor the progress of the Bill and provide updates on significant developments.

ACCC Action against Energy Retailers and the use of “Do Not Knock” Stickers

In our recent Focus Paper, we noted that the Australian Competition and Consumer Commission (the ACCC) had filed two separate proceedings in the Federal Court against three energy retailers and the marketing companies they engaged in respect of the door-todoor sales practices used by their salespeople. ³ In one of the two cases, ACCC v Neighbourhood Energy Pty Ltd, ⁴ the Federal Court has ordered, by consent of the parties, that a total penalty of $1 million be paid by Neighbourhood Energy Pty Ltd and Australian Green Credits Pty Ltd (the Defendants).

The Court imposed:

• a penalty of $850,000 to be paid by Neighbourhood Energy Pty Ltd;
• a penalty of $150,000 to be paid by Australian Green Credits Pty Ltd;
• two-year injunctions against the Defendants to restrain them from engaging in similar conduct in the future;
• publication orders requiring the Defendants to undertake corrective advertising; and
• orders requiring the Defendants to establish an adequate compliance program.

This is the first case brought under the “unsolicited consumer agreement” (UCA) provisions of the ACL and provides the first guidance on the significance of ‘do not knock’ stickers. The ACCC Chairman, Rod Sims, has stated that the case shows that a breach of the UCA provisions occurs every time that a salesperson ignores a visible ‘do not knock’ sign on a consumer’s door. However, it is important to note that the Federal Court’s orders were made after mediation and by the consent of the parties. It is unclear whether the outcome would have been the same had the Federal Court been required to consider whether ‘do not knock stickers’ constitute a request to leave by an occupier of the premises.

It also important to note that the heavy penalties imposed on the Defendants are not solely due to their failure to comply with the ‘do not knock’ stickers.

In respect of the breach of the disclosure requirements of the UCA provisions of the ACL, the salespeople representing the Defendants did not inform consumers clearly:

1. that the salesperson’s purpose was to seek the consumer’s agreement for the supply of electricity;
2. that the salesperson would be obliged to leave immediately upon request; and
3. of the name of the marketing company and the address of the supplier of the services.

In addition to the breach of the disclosure requirements of the UCA provisions of the ACL, the misleading and deceptive conduct prohibition in the ACL was also breached by the salespeople stating that:

1. the salesperson was not at the premises to sell anything;
2. the consumer had been ‘zoned incorrectly’; and
3. the consumer was being wrongly billed by their supplier.

The second case commenced by the ACCC against another energy retailer ⁵ is still in the process of mediation and the Federal Court has extended the period in which mediation is to occur to 1 December 2012.

Addisons will closely monitor the development of this case and provide updates accordingly.

The assistance of Mary Huang, Graduate, of Addisons in the preparation of this article is noted and greatly appreciated.

Footnotes

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