Door to door and telesales

Door to door marketing and telesales can result in considerable consumer detriment. EWON calls for a ban on these tactics, in line with other states.  

The Ombudsman recently wrote to the Minister for Energy to call on a ban of unsolicited door-to-door marketing and telesales for energy products and services in NSW. We argued that this will stop consumer detriment created by misleading information and pressure sales. 

EWON receives complaints about energy products and services, marketing to customers via door to door and telesales, as well as other channels like online promotions, utility connection services and brokers. Customers complain to EWON about: 

• misleading and confusing information 
• pressure tactics and unreasonably persistent contact 
• energy accounts established with incorrect customer details and concession rebate information 
• energy accounts established without explicit, informed consent 
• marketing to non-account holders and/or people in vulnerable circumstances. 

A decade ago, EWON received a high volume of these complaints, until an important change in the energy marketing landscape in the early 2010s, which came about because each state’s energy ombudsman scheme was continually reporting systemic issues and consumer detriment. Between 2012 and 2015, the Australian Competition and Consumer Commission brought multiple Federal Court proceedings against various energy retailers and marketing/sales companies for inappropriate and illegal door to door marketing conduct.² The three biggest energy retailers subsequently withdrew from door to door marketing to residential customers.  

The withdrawal of the three biggest retailers from door to door marketing had a significant impact on reducing consumer detriment and complaints to EWON. In FY14, complaints to EWON about marketing decreased by 50% compared to FY13. 

Since then, we’ve seen an overall downward trend in marketing complaints. Some mid-size and smaller retailers still use door to door marketing, and retailers of all sizes use telesales. Given the withdrawal of the three largest retailers from door to door marketing was voluntary, there is always the possibility they may return to the practice. 

Victoria has progressively restricted door to door sales and telesales by banning: 

• door to door sales for solar businesses participating in Victoria’s Solar Homes programs from 1 September 2021 
• electricity and gas companies from using high pressure sales tactics such as unsolicited door to door sales or cold-calling from 31 December 2021 
• accredited providers and program participants in the Victorian Energy Upgrades program from using telemarketing to market energy efficient products or services from 1 May 2024 – with a ban on door to door methods to take effect on 1 August 2024. 

The NSW government could stop consumer detriment by introducing similar bans to those introduced in Victoria. 

² ACCC media release: Unlawful door-to-door sales tactics | March 2015

Case studies

 Door to door marketing leads to unmanageable debt 

A door to door marketing representative from an energy retailer attended the customer’s property. As the customer spoke limited English, she asked her son to interpret. The representative advised the customer and her son that all other residents in their apartment block had switched to the retailer and that she would save money if she switched as well. She agreed to establish an account in her name, and the representative put her through to the retailer over the phone to provide consent. 

The customer started receiving bills in both her and her son’s name. She felt the bills were higher than promised by the marketing representative. The customer switched to another retailer, but had difficulty managing the remaining debt of $1,700 on the closed account, as she could only make limited payments. The energy retailer then referred the debt to a collection’s agency in both her and her son’s name, so they were both concerned about their credit ratings. 

EWON investigated the complaint in January 2024 after the retailer failed to resolve it directly. To resolve the complaint, the retailer withdrew the debt from collections, removed the son’s name from the account and waived the balance of $1,700.