On 8 April 2014, the ACCC issued a draft determination proposing to re-authorise an industry code of practice for face-to-face energy sales undertaken by electricity and gas retailers (Code).
Energy Assured Limited (EAL) was formed by energy retailers to develop and manage the Code, which applies when energy products are sold through house visits and, in the proposed new version of the Code, in other face to face settings such as at kiosks at shopping centres.
The Code was first authorised by the ACCC in 2011 and is aimed at ensuring better standards in face-to-face energy sales through the training and accreditation of sales agents, as well as self regulating the conduct of face to face sales agents and energy retailers in their dealings with consumers.
However, the ACCC is concerned that the scheme, as it is currently operating, does not focus sufficiently on the accountability of energy retailers for the behaviour of sales agents employed by them.
The most significant changes proposed by EAL are:
- an extension of the Code to include all face to face sales, other than those conducted on a member’s premises (eg sales at shopping centres). Previously the Code included only door to door sales;
- instead of yearly compliance audits of members by an independent firm of auditors, EAL proposes to conduct compliance checks which may include desktop audits, surprise site visits, sales agent interviews and mystery shopping. Compliance checks will be conducted periodically and at least annually;
- amendments to the Code to cover the practice by member marketing companies of engaging sub-agent principals to manage sales agents rather than engaging sales agents directly;
- compliance reports by members must be submitted to EAL quarterly rather than monthly;
- additional provisions to ensure that deregistered sales agents can not be engaged in indirect sales roles such as managing, assessing or training sales agents;
- an update to the EAL Standard for the conduct of verification calls to ensure that a customer is not coached during the post-sale verification procedure.
The ACCC has proposed to grant authorisation subject to conditions and is satisfied that the likely public benefits that will result from the Code would outweigh the likely detriments and therefore the ACCC proposes to grant