The Australian Competition and Consumer Commission (ACCC) has been successful in its appeal against the dismissal of proceedings, with the Full Federal Court unanimously setting aside the decision of Justice Jessup in the recent case of ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90.

The Full Federal Court made a declaration that Lux Distributors Pty Ltd (Lux) engaged in unconscionable conduct in relation to the sale of vacuum cleaners to three elderly consumers in their home.

The ACCC alleged that Lux representatives called elderly consumers claiming they would be in the area and would like to offer a ‘free maintenance check’ on their vacuum cleaners. It was alleged that each of the consumers were then subjected to unfair and pressuring sales tactics to induce them into purchasing a vacuum cleaner in excess of $2280. Each sales representative stayed for over 1.5 hours.

The Court held that Lux contravened section 51AB of the Trade Practices Act 1974 and section 21 of the Australian Consumer Law. The Court noted the following reasons for the finding:

  • the deception to the consumers in obtaining entry into their homes;
  • depriving the consumer of the opportunity to deny entry to the sales person on the true basis for the visit;
  • Lux exploited the position they had deceptively obtained by transforming the home visit from a stated purpose to the true purpose of making a sale;
  • the subtle inequality in bargaining power gained by the representative through the householder being unwilling to ask the person to leave;
  • the vulnerable consumers felt obligated and pressured to buy a vacuum cleaner;
  • the lack of efficacy and fairness in the selling process;
  • the breaches of Commonwealth and State laws which regulated direct selling, disclosure of purpose and identity when entering a persons home, duties of dealers and duties not to remain on premises for long periods without written consent.

Importantly, the Full Federal Court stated that “unconscionability means something not done in good conscience. Notions of moral tainting have been said to be relevant…as long as one recognises that it is conduct against conscience by reference to the norms of society that is in question.”