the impact of door-to-door sales practices on vulnerable consumers, including refugee communities, low-income families and public housing residents. By using the real life experiences of our clients at the Footscray CLC, this report examines the social and legal impact of door-to-door sales. This report finds that disadvantaged consumers are disproportionately affected by damaging and often illegal sales practices. Such practices have social and financial consequences for communities and individuals.The report offers several findings -
1 Door-to-door energy sales practices disproportionately affect vulnerable consumers. For the purposes of this report, “vulnerable consumers” include: (a) public housing residents; (b) concession holders; (c) non-English speakers including people of refugee background; (d) women, particularly when home alone; and (e) the elderly, and young people.
2 Vulnerable consumers are more susceptible to signing a new energy contract as a result of a door-to-door energy sale. They are more likely to ‘switch’ energy providers because they feel vulnerable and pressured; the practice of door-to-door sales often involves entering the protected, private space of a potential consumer (including single mothers, the elderly, and young people home alone).
3 Many vulnerable consumers receive misleading or false information about the nature and content of energy contracts. This can result in negative settlement outcomes for those consumers with a refugee background, who can suffer long-term effects, such as fear and distrust of strangers knocking on their door.
4 Our case studies demonstrate breaches of: (a) contract law; (b) laws regulating unsolicited consumer agreements (door-to-door sales); (c) prohibitions on misrepresentations and misleading and deceptive conduct; (d) prohibition against unconscionable conduct; (e) unfair tactics, such as undue harassment or coercion; and (f) energy-specific consumer protections.
5 Many vulnerable consumers are unable to provide “informed consent” in a door-to-door energy sales context. There is no evidence that post-sale telephone verification procedures overcome this problem. 6 Consumers of refugee background are commonly not able to utilize information provided by Consumer Affairs Victoria when responding to door-to-door sales, as this information makes a number of inappropriate assumptions about the skills and resources available to this group of consumers.
7 Self-regulated industry Codes of Practice are not an effective means of protecting consumers.
8 Independent enforcement against misleading or illegal door-to-door sales practices can be effective.
9 Beyond door-to-door energy sales. Alternative methods for providing direct energy sales to vulnerable consumers are available.The complementary recommendations are -
10 We call for inclusive energy policy. The Australian Government’s social inclusion agenda as well as the Department of Immigration and Citizenship’s settlement programs are being undermined by door-to-door energy sales practices. Migrants and refugees are telling us that door-to-door sales practices, in general, are harmful and unwelcome and have a negative impact on their social, emotional and physical well-being. The negative impacts are magnified when door-to-door energy sales are conducted in a misleading or illegal manner. We recommend that governments and service providers work together to ensure that issues of settlement, energy provision, and legal assistance is as consistent and inclusive as possible.
11 We call for support and expansion of the “Do Not Knock” campaign. We support the Consumer Utilities Advocacy Centre’s recommendation that the Essential Services Commission develop an online tool to allow consumers to be added to retailers’ “No Contact” lists via a central system. We recommend government funding be allocated to trialling “Do Not Knock” areas, which may include designated public housing flats with sufficient resident backing. We make this recommendation specifically in the context of energy door-to-door sales practices.
12 We support continued enforcement against illegal door-to-door sales practices. We commend the Australian Competition and Consumer Commission’s (ACCC) current focus on enforcement of door-to-door sales misconduct and support measures to educate vulnerable consumers and encourage them to invoke their rights.
13 We call on energy retailers to provide an alternative to door-to-door sales. We argue that maintaining a competitive market can and should protect the most vulnerable consumers. We recommend alternative strategies, which could include “Energy Market” events in which consumers can attend an open forum in a public space with energy retailers offering competitive rates. This could be supported by interpreters, community leaders and other service providers as appropriate.
14 We support targeted and appropriate community education. We welcome and support the targeted community education already provided by Consumers Affair Victoria (CAV) and call upon CAV and other service providers to expand the tools available for non-English speaking consumers with low literacy and numeracy rates and for those who may not have a computer. We suggest the models employed by Footscray Community Legal Centre and Victoria Legal Aid which use visual stimulants and community venues.
15 We call for an enhanced Code of Conduct from energy retailers. The industry Code of Conduct by Energy Assured Limited should include strategies to address systemic misconduct which can occur in door to door sales practices. Commission-based selling which encourages aggressive sales tactics must be addressed.