The Victorian company found guilty in the Federal Court of using a “deceptive ruse” to market rooftop solar systems, as well as false claims of Clean Energy Council accreditation, has been fined $3 million.
In a judgment handed down on Monday, Federal Court Justice Michael O’Bryan ordered Dandenong South-based Vic Solar Technologies to pay the $3 million penalty and its owner Sunny Srinivasan to pay $450,000 and be disqualified from managing corporations for a period of five years.
The case, as One Step Off The Grid reported in February, was brought by Consumer Affairs Victoria, claiming that the company had breached consumer protection laws on numerous occasions, including through the use of dodgy door-to-door sales tactics and false claims of endorsement from the CEC.
The court heard that Vic Solar sought to charge customers at above average market prices for solar panels and then offered significant discounts on the over-inflated prices to compel customers to agree on the sale immediately.
In his February judgement, Justice O’Bryan describe Vic Solar’s entire business model as effectively unconscionable, for its reliance on third-party sales lead generators to advertise a non-existent community bulk-buy offer for solar panels.
“Those statements were misleading in that the Community Bulk Buy was a fiction,” he said. “Vic Solar’s business model, incorporating the Community Bulk Buy marketing concept, used a ‘deceptive ruse’ to gain entry into the consumer’s home and encourage the sale.
“This conduct was done in bad faith and sought to exercise undue influence on the consumer by misrepresenting the nature of the company and the value of the product on offer.”
In a statement on Thursday, the Consumer Action Law Centre welcomed the outcome of the case, but said it demonstrated the need to ban door knocking and cold calling in the solar industry to stamp out poor behaviour.
“Where companies engage in marketing practices that exploit people, including via lead generation or third-party marketers, it’s important that strong enforcement action and penalties follow to deter similar misconduct,” said Consumer Action CEO Gerard Brody.
“However, this case is also a clear reminder of the persistent problems with door-to-door sales which often target people in vulnerable circumstances and involve high-pressure sales tactics that can lead to serious harm.
“As Victoria transitions to a zero-carbon future, we need to promote trust in the solar industry and door-to-door sales and cold calls only serve to undermine this trust,” Brody said.
“The Victorian government needs to ban unsolicited sales of rooftop solar panels and related products to proactively protect Victorians from predatory practices.
As noted in February, the state Labor government has already committed to a ban on unsolicited sales of traditional energy through its Energy Fairness Plan, which Consumer Action believes should be extended to sales of solar products.
The state has also set up tight controls around its rooftop solar and home battery storage rebates, requiring applicants to the scheme to use a CEC-accredited retailer and installer, and precluding any applications initiated via cold-calling.
But Brody argues that any ban must cover the entire solar industry and not just the companies participating in the government’s Solar Homes Program.
“Some of the worst cases of misconduct are occurring outside of this program,” he said, citing Vic Solar as a prime example.