New ACCC report examines door to door sales industry

Category: News

The Australian Competition and Consumer Commission has launched a research report on the door to door sales industry, which reveals that in 2011 over 1.3 million sales were conducted through this often maligned sales channel. 

The report, titled Research into the door to door sales industry in Australia, is the first report into the industry in Australia, and reveals its scale and breadth. The report shows companies usually engage third party sales agents to deliver door to door sales services. Some of these reported preying on vulnerable 'easy targets', using false pretexts to hook consumers in, such as pretending to have lost their dog, or failing to provide consumers with information on their rights as required by law.Door_to_doo

The report also shows that the four biggest industries using door to door sales –energy, telecommunications, solar panels and pay TV – generally see this sales channel as among the most effective for generating sales.

Of those 1.3 million door to door sales executed last year, approximately one million sales related to energy services. ACCC Chairman Rod Sims says every household in Australia is door knocked on average eight times a year, with the new report confirming the watchdog's concerns about widespread, unscrupulous industry practices. Sims warns business owners that even when they rely on third parties to perform door to door selling for them, they have strict obligations to consumers under the unsolicited selling provisions of the Australian Consumer Law.

“The ACCC has already started a number of enforcement actions, are investigating several more and will not hesitate to take court action against companies or their sales agents who dupe consumers or don't abide by the rules,” he warns.

The ACCC report also highlights how the industry’s reliance on commission-based remuneration schemes drives aggressive sales behaviour and encourages agents to adopt tactics that are not fully compliant in order to secure more sales. Also of concern is the varying degree of compliance training and monitoring undertaken by companies and sales agents. Whilst most traders and service providers reported providing training, very few sales agents interviewed possessed a sound knowledge of their legal obligations.

While the door to door sales industry has historically been the subject of a high number of complaints to the ACCC, the watchdog predicts door to door sales are only likely to increase in Australia. The full report can be downloaded here.

My Business Reader Poll: Consumers may loathe it, but is door to door selling still an important sales channel for business owners?

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