Solar company fined $30,000 for misleading WA consumers (Clean Energy Enterprises Pty Ltd)
A Melbourne-based solar company has been fined $30,000 by the Perth Magistrates Court on 20 December 2016 for misleading WA consumers and defying laws relating to cold calling.
ACN 158 148 951 Pty Ltd, formerly known as Clean Energy Enterprises Pty Ltd, was also ordered to pay legal costs of $15,681 after being convicted of 23 charges of breaching the Australian Consumer Law (ACL). A Director of the company, who was granted a spent conviction, was fined a total of $3,000 and ordered to pay costs of $1,742.
Between July 2013 and August 2014, sales agents for the company sent emails to ten consumers who had previously purchased their solar panel systems through other companies which were no longer in existence offering to conduct a 31-point maintenance service for a $330 fee, including an ‘anti-island test’.
An ‘anti-island test’ involves turning off the mains power switch to the house and checking that the inverter of a solar PV unit also switches off (this may take up to a minute) and does not continue to run in isolation, or as an island, when the house is disconnected from the main network supply.
The email stated that the test was required under ‘State and Federal Electricity Distribution Regulations’. However, at the time there were no regulations which required anti-island testing on solar panel systems. It is an offence under the ACL to make false or misleading representations concerning the need for any goods or services.
The company was informed by the Department of Commerce on several occasions that the testing was not required in WA but it continued to misinform their customers. The Department issued a warning to consumers regarding this issue in July 2013.
Between April 2013 and July 2013, sales agents for Clean Energy Enterprises had cold called three consumers offering the 31-point maintenance check and, in two cases, a negative earthing kit. The consumers agreed to the purchase, however, the transactions breached laws relating to unsolicited consumer agreements.
Being approached uninvited, the consumers had the right to a ten business day cooling off period, during which no payments can be made or goods supplied. The company failed to provide information to the consumers on their cooling off rights and how they could cancel the contract if they changed their mind, as required by the ACL. In one case, the consumer was not refunded her deposit until 21 July 2016, after she had terminated the agreement and requested a refund at the end of July 2013.
Acting Commissioner for Consumer Protection David Hillyard said all businesses that cold call consumers or engage in door to door marketing should know and abide by the rules.
“There are protections in place for consumers who are approached uninvited by salespeople, whether at their home, a shopping centre or car park and whether by phone or in person at their front door,” Mr Hillyard said.
“Consumer agreements valued at more than $100 are subject to a cooling off period and the onus is on the salesperson to ensure that the people they approach are aware of their rights and given clear instructions on how to cancel the contract over the following ten business days if they no longer want to go ahead. Payments should not be made or accepted during this period.
“It is a serious breach of the ACL to include false statements in advertising or during a sales pitch designed to deceive consumers.
“Failing to follow these simple rules will put the business at risk of prosecution, not to mention the damage caused to their reputation in the marketplace.”
General information about consumer rights is available on the Consumer Protection website www.commerce.wa.gov.au/cp and enquiries can be made by email firstname.lastname@example.org or by calling 1300 30 40 54.
END OF RELEASE
UPDATE: On 22 June 2018, the Supreme Court upheld an appeal by Clean Energy Enterprises Pty Ltd against a Magistrate Court conviction of breaching the Australian Consumer Law (ACL) with regard to unsolicited consumer agreements so those charges, the associated fine and costs were set aside. However, the Supreme Court dismissed the company’s appeal against the conviction of breaching the ACL with regard to making false or misleading representations to consumers, so that conviction will remain.
FURTHER UPDATE: On 9 May 2019, the Court of Appeal upheld an appeal by Clean Energy Enterprises Pty Ltd against the previous decision of the Supreme Court, thus setting aside the conviction for the making of false or misleading representations to consumers. Following this appeal, all convictions, associated fines and previous costs orders against Clean Energy Enterprises have been set aside.
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