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Perth, July 28: Businesses are routinely using high-pressure sales tactics, misleading consumers and breaching existing consumer protections through unsolicited selling practices, according to a new Australian Competition and Consumer Commission (ACCC) report.
The report, released following a designated complaint from the Consumer Action Law Centre, recommends stronger consumer protections, including tougher penalties for breaches, a new “opt-in” system for unsolicited sales and clearer rules covering sales generated through online lead generation.
Unsolicited selling occurs when businesses approach consumers without invitation, including through telemarketing, door-to-door sales or in public places away from the seller’s usual place of business.
The ACCC found personal information collected through online quotes, comparison websites, surveys and free trials is frequently sold by data brokers and used to generate unsolicited sales leads.
“Our report shows how consumers are being exposed to unsolicited sales practices that place them at financial and psychological risk, particularly consumers experiencing vulnerability or disadvantage,” ACCC Deputy Chair Catriona Lowe said.
Market research commissioned by the ACCC found unsolicited selling remains widespread. About three-quarters of consumers surveyed had experienced at least one unsolicited sales approach in the past two years, while 28 per cent had made a purchase following one.
Telemarketing was the most common form of unsolicited selling, with 60 per cent of respondents contacted in the previous six months. Forty-one per cent had been approached in public places, while around 30 per cent experienced door-to-door sales.
Solar panels and other energy products were among the most commonly purchased items through unsolicited selling, with many consumers spending more than $1,000. Many also entered finance arrangements, including Buy Now Pay Later schemes.
The report found almost two-thirds of consumers felt pressured during unsolicited sales interactions, while 40 per cent later regretted a purchase and more than 60 per cent experienced problems with the goods or services they bought.
Consumers reported salespeople often refused to accept “no” for an answer and engaged in misleading conduct, including misrepresenting costs, product suitability or eligibility for government programs.
“Our research demonstrates widespread non-compliance with existing rules by businesses and salespeople who engage in unsolicited selling. It is clear that change is needed,” Lowe said.
“We have recommended targeted, stronger rules and increased penalties to address these serious concerns.”
The ACCC found businesses frequently failed to meet existing legal obligations designed to protect consumers. Among those who made a purchase following an unsolicited sales approach, only 70.9 per cent said the salesperson identified themselves, 54.1 per cent received a written agreement and 63 per cent were informed of the 10-day cooling-off period.
The commission is recommending replacing the current cooling-off period with an “opt-in” model, requiring consumers to actively confirm a purchase after the sales interaction before the agreement takes effect and payment can be processed.
“Because of the frequent breaches of existing restrictions, we recommend the cooling off period be replaced with an ‘opt-in’ model. This will better protect consumers from high pressure selling tactics and from making purchases they do not want or cannot afford,” Lowe said.
The report also highlights concerns about the growing use of digital lead generation, with consumers raising issues around privacy, consent and the use of personal information for marketing.
“We consider that unless the purpose of the data collection to generate a sales contact is clearly disclosed a sale remains unsolicited, however this has not been tested. The rules in place now were developed before the widespread use of consumers’ data in generating sales leads. We are recommending that lead generation is explicitly included in the rules governing unsolicited selling,” Lowe said.
The ACCC also noted evidence that existing protections are failing some vulnerable groups. More than one-third of First Nations respondents had a Do Not Knock sticker displayed at their home, yet almost three-quarters said they were still approached by door-to-door salespeople.
“We were also concerned that many respondents reported that they were not provided with a written copy of the agreement and that consumers generally lacked awareness of the existing protections for unsolicited consumer agreements,” Lowe said.
Current penalties for breaching unsolicited selling laws are capped at $50,000 for corporations and $10,000 for individuals.
The ACCC has previously taken successful enforcement action against businesses in the energy, education, telecommunications, therapeutic goods and health insurance sectors over unlawful unsolicited selling practices.
“We acknowledge consumer groups’ view that a ban is the most effective response to concerns about unsolicited sales practices. We consider our targeted proposals to strengthen existing safeguards will protect consumers from harm, particularly when coupled with new laws banning unfair trading practices,” Lowe said.
“The proposed approach preserves the selling channel for the minority of consumers who value it. We have also recommended that the effectiveness of the recommended measures is subject to review within two years of implementation to see if compliance and outcomes have improved.”
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