agl fined $1.5m for door-knocking lies

AGL fined $1.5m for door-knocking lies
Date May 21, 2013 - 1:51PM (0) Read later Lucy Battersby
Lucy Battersby


A door-to-door salesman spruiking AGL's electricity and gas services in the Melbourne suburb of Coburg in late 2011 has cost the energy giant $1.55 million in penalties for lying to consumers.

The penalty against AGL Sales and AGL South Australia follows legal action the Australian Competition and Consumer Commission in the Federal Court in Melbourne.

A third company, CPM Australia, was also ordered to pay $200,000 for its role in marketing on behalf of the AGL companies.

AGL said today it has stopped using doorknockers in March to sell its products because it was a ''risky sales technique''.

Advertisement The court found that the salesman engaged by CPM to sell gas and electricity door to door in Victoria "made false representations and engaged in misleading and deceptive conduct during uninvited calls on consumers", the ACCC said.

One particular door knocker misrepresented his visit, such as claiming he was not selling anything, and made false or misleading statements about the prices charged by AGL and other suppliers.

According to orders released by Justice John Middleton today, a Coburg resident, called Mr G in court documents, was called upon by a representative of CPM in September 2011. The representative claimed he from an "Investigations Department" and that Mr G had been over charged for electricity and could re-claim the money.

"In order to avoid being over charged for the supply of retail electricity and/or retail gas, it was necessary for Mr G to obtain retail electricity and/or retail gas from the distributor of those products [and] if AGL was Mr G's retail electricity supplier his retail electricity bill would be between $100 and $120 per quarter," Justice Middleton wrote.

However, this was not the case, and CPM was found in breach of four section of the Australian Consumer Law.

Another resident was told she would not have to pay her last bill if she said "yes" in all the questions asked of her in a telephone conversation.

The door knocker also failed to tell residents that they could ask him to leave the premises immediately.

In South Australia a resident was told her energy supplies would automatically revert back to AGL SA after two years, when this was not the case.

CPM has been ordered to implement a compliance program on top of the $200,000 fine and publish corrective advertising in newspapers.

AGL's general manager of retail energy, Stephen Mikkelsen, expressed regret the breach had occured and called on the rest of the energy industry to stop door knocking.

“This case demonstrates how difficult it is to control what salespeople do when they are at people’s premises. Even if a company puts significant training and compliance mechanisms in place, doorknocking remains a risky sales technique,'' he said.

“Doorknocking also preys on succeptible segments of the community, such as the elderly and migrants. Those companies still undertaking the practice are doing harm to the energy sector’s reputation.”

Meanwhile, the ACCC pointed out Neighbourhood Energy and Australian Green Credits were last year also fined significant sums for door-to-door sales tactics.

"These significant penalties send a clear message to businesses that do not adhere to their obligations under the Australian Consumer Law. The ACCC will not hesitate to take action to protect consumer in their homes from unscrupulous sales tactics and enforce compliance with the laws," the ACCC chairman Rod Sims said in a statement.



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