The Australian Competition and Consumer Commission’s (ACCC) Full Federal Court victory against a company that sold vacuum cleaners costing more than $2000 to elderly women in their homes has sent a clear message to salespeople who gain entry to customers’ homes under false pretences—your time is up.
The ACCC’s case alleged that a sales representative employed by Lux Distributors Pty Ltd offered free vacuum cleaner maintenance checks to gain entry to their homes. It also alleged that, once inside, the salesperson would employ sales routines which could last up to 90 minutes and result in the homeowner buying a vacuum cleaner they didn’t necessarily need or want.
‘This type of selling has been causing Australians problems for years. Salespeople find a legitimate sounding excuse to get in your front door and then use a tried and tested script and techniques that make people sign up to things that, all things being equal, they normally wouldn’t,’ said Consumer Action Law Centre’s CEO, Gerard Brody.
‘In this case, the unfair sales tactics related to vacuum cleaners but, in our experience, similar ruses and sales tactics are used in relation to unsolicited sales of other goods and services, including educational software. These practices affect a range of vulnerable groups, including immigrant communities,’ said Mr Brody
Consumer Action Law Centre published a report in 2010, Shutting the Gates: an analysis of the psychology of in-home sales, which found that salespeople gain entry into homes, then manipulate emotions by stimulating concern and anxiety. The report’s accompanying docu-drama demonstrates how some salespeople activate a parent’s feelings of guilt about their child’s education and employment prospects to make a sale.
The Full Federal Court today found that Lux had engaged in unconscionable conduct in breach of the Australian Consumer Law and stated ‘the norms and standards of today require businesses who wish to gain access to homes of people for extended selling opportunities to exhibit honesty and openness about what they are doing, not to apply ruses to gain entry.’
Mr Brody said salespeople should heed the warning this Full Federal Court decision provides or face the consequences. ‘This case sets a valuable precedent and will help centres like ours, as well as everyday Australians, stand up to unscrupulous salespeople. Other companies who use unfair sales tactics are mistaken if they think consumer advocates will be satisfied by one victory—we’ll keep fighting until this unfair sales tactic is a thing of the past,’ said Mr Brody.
‘The ACCC and the brave consumers who gave up their time to give evidence have won a real victory for Australians with this case. This result will have ramifications for salespeople across the country, and will be celebrated by Australia’s community law centres which have spent hundreds of hours fighting this type of case.
‘The cases the ACCC takes on have significant public interest. Today’s decision is a victory for the ACCC and is a testament to its willingness to properly balance competition and consumer interests and prioritise those issues affecting the most vulnerable.’
Media contact: Dan Simpson, 0413 299 567