Origin ditches door-to-door sales: victim of “draconian” penalties

Origin Energy will stop door-to-door sales by the end of September, a move likely to be prompted by the “draconian” penalties surrounding door-to-door sales, according to the Direct Selling Association of Australia.

Origin announced it would abandon the sales method yesterday following a “vigorous review” of its customer engagement and sales channels.

The announcement came just one day after the Australian Competition and Consumer Commission commenced legal proceedings against Titan Marketing for allegedly misleading companies while engaging in door-to-door sales.

The energy retailer is not the only business pulling back from door-to-door sales, and joins EnergyAustralia and AGL who stopped door-to-door selling in March after being fined $1.5 million by the Federal Court.

Frank Calabria, chief executive of energy markets at Origin, said in a statement developments such as the internet and smart meters meant there was less call for door-to-door sales.

“We know that the large majority of customers are now using the internet to engage with energy retailers, and Origin continues to invest in digital products and services, with a growing suite of successful innovations now in market,” he said.

“[The] announcement reflects a further evolution in how we engage with our customers and our ongoing commitment to building a better, more direct relationship with them.”

But John Holloway, executive director of the DSAA, told SmartCompany while he could not comment on the specific motivation behind Origin’s decision it was clear the crackdown by the ACCC was having an impact on door-to-door sales.

“There’s no doubt in the world Australian Consumer Law has been a game changer in some of the traditional methods of direct selling, including door-to-door selling, whether it is achieving its objectives I am not sure,” he says.

“The reality is there are draconian penalties being visited on companies that really have no control over what is happening at the coalface.”

Holloway acknowledges door-to-door sales have always been problematic, particularly if they involve high pressure sales techniques.

“The view the association takes is the existing law is adequate and the Australian Consumer Law is really taking it to another level which is targeting the legitimate part of the market,” he says.

“It is a very complex and uncertain area of law.”

But Holloway says door-to-door selling may be down but is not out completely as a sales method.

“As much as you might have people in the consumer lobby who want to ban it totally, I can’t see it disappearing as a sales method,” he says.

“It is certainly being modified; you can probably count on one hand the companies that still do it now.”