The Australian Competition and Consumer Commission has issued a draft determination proposing not to authorise an industry code of practice for door-to-door sales practices by electricity and gas retailers on the basis that it is unlikely to produce a material benefit for consumers.
A group called Energy Assured Limited was formed by electricity and gas retailers to develop a code regarding the conduct of sales agents when making house visits.
While the ACCC supports efforts by the energy industry to improve outcomes for consumers through the adoption of self regulatory mechanisms like codes of conduct, the ACCC believes the proposed code is unlikely to deliver on this objective.
The ACCC is of the view that the code is underdeveloped and deficient in a number of areas. For example:
- the information provided to consumers about their rights when in contact with a sales agent or when entering a contract falls short of existing regulatory obligations, for example under the Australian Consumer Law
- consumers and consumer groups are unable to make complaints about members for breaches of the code
- there is insufficient public accountability around reporting non-compliance with the scheme, particularly in relation to systemic breaches, and
- the sanctions process is not sufficiently rigorous to deter non-compliance, particularly in regard to members of the scheme.
The ACCC considers that the disparity between the lower level of protection offered to consumers under the scheme relative to the level offered by existing regulation may lead to public confusion.
ACCC chairman Graeme Samuel said door-to-door selling of energy in Australia is regulated under State, Territory and Commonwealth law and additional regulation must enhance the protection regime already in place.
"The proposed code does not enhance consumer protection and in some cases it doesn't meet the standard of conduct currently specified by law," Mr Samuel said.
Energy Assured Limited sought authorisation from the ACCC for the code as businesses agreeing on terms of trade has the potential to breach competition provisions of the Competition and Consumer Act 2010.
The ACCC is now seeking submissions on this draft decision, prior to making a final decision in the coming months. Further information about making a submission can found on the ACCC's website.
The ACCC's draft determination will be available from the ACCC website, www.accc.gov.au/AuthorisationsRegister