Unsolicited and door-to-door selling practices still hurting consumers, advocates say

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 7 years ago

Unsolicited and door-to-door selling practices still hurting consumers, advocates say

By Lucy Cormack
Updated

Pauline Williams and Graham McGrath did not believe they could afford solar panels on their shared home.

And yet in May last year, after one unsolicited phone call and a knock at their door, the two disability support pensioners had signed up for $15,000 worth of solar panels on their home in Minyip, in rural north-west Victoria.

They say that despite their doubts, the salesperson assured them about the money they could save, making a representation that they may no longer have to pay electricity bills.

They signed up to a payment plan with a suggested retail finance provider - $176 a fortnight, for 87 fortnights.

When census came knocking, more than one in 10 homes was empty.

When census came knocking, more than one in 10 homes was empty.Credit: Eddie Jim

However, in the weeks that followed, their application to the finance provider was rejected - though not before the solar company had delivered and installed their solar panels.

The company is now pursuing Ms Williams and Mr McGrath for the $15,000 in full. As a consequence their home is at risk.

The story is all too familiar to consumer advocates, many of whom are calling for a total prohibition on unsolicited and door-to-door sales.

In Sydney, suburbs recording the most complaints about door-to-door salespeople include Greenacre, Blacktown, Ashfield, Carlingford, Emerton and Pymble, according to NSW Fair Trading figures.

Advertisement
Graham McGrath and Pauline Williams, who signed up for solar panels.

Graham McGrath and Pauline Williams, who signed up for solar panels.

"Unfortunately, it is a really big problem and it affects some of the most vulnerable people ... they are the ones that end up being targeted," said Gerard Brody, chief executive of the Consumer Action Law Centre.

"A seller will come to your house ... and the sales pitch is to buy right then, not to shop around, as you expect to do in well-formed consumer markets."

The Australian Consumer Law provides a set of national laws that cover door-to-door sales, giving consumers protections such as the right to ask a salesperson to leave, receive certain information and to cancel a contract within a 10-day "cooling off" period.

ACCC deputy chairwoman Delia Rickard.

ACCC deputy chairwoman Delia Rickard.

However, continued reports of consumers being misled have prompted criticism about the selling practice.

Last year, the Department of Fair Trading fielded 121 complaints about door-to-door sales, the majority of which related to construction work; particularly roofing, renewable energy and landscaping, as well as education and training and electricity supply.

The Consumer Action Law Centre is calling for a ban on unsolicited selling, among a raft of recommendations it is making for the upcoming consumer law review, due to report in 2017.

Recent polling by Ipsos found more than 80 per cent of Australians have a negative opinion of unsolicited selling, while almost 77 per cent would like to see the practice banned.

Top suburbs for complaints about door-to-door sales. Source: NSW Fair Trading

"I think it's something that's being fiercely debated at the moment. There are very good arguments for getting rid of it ... however there are also some for retaining it," said Delia Rickard, deputy chair of the Australian Competition and Consumer Commission.

Ms Rickard said ACCC researchers had interviewed former door-to-door salespeople who gave evidence that "they were deliberately sent to target disadvantaged areas".

"We saw the worst of it in VET-FEE HELP," said Ms Richard, referring to the sale of online vocational diplomas funded by taxpayers that were marketed to students who could not reasonably complete the course, or pay the fees.

"It was a combination of door-to-door sales practice, combined with incentive remuneration for sellers ... where they basically rely on commissions," she said, describing some tactics as "absolutely outrageous" and "unconscionable."

But John Holloway, executive director of industry body Direct Selling Australia, said it was "simply not the case that everyone in direct selling is out there to rip people off."

Mr Holloway was critical of regulations brought in with the introduction of the Australian Consumer Law in 2010, namely those which took transactions away from fixed premises and the introduction of longer cooling-off rights.

"They've completely messed up and we hope the review can bring balance back [for direct sellers]."

Solicitor Mathew Kenneally, who is representing Ms Williams and Mr McGrath, said their experience was just one example of the dangers of unsolicited selling.

"These sales techniques are designed to push consumers to make purchases they would not make if they were in a shop or searching online."

Most Viewed in Business

Loading