A Victorian solar company has been found to have 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 Clean Energy Council.
In a recently delivered judgement, the federal court found the entire business model of the Dandenong South company, called Vic Solar, was 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,” federal court Justice Michael O’Bryan said in his judgement. “The effect of the statements was that the lead generators failed to advise clearly that the true purpose of the visit was to seek the home-owner’s agreement to a supply of a solar PV system by Vic Solar.
“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,” Justice O’Byran said.
The court found 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.
Vic Solar was also found to have used sales tactics that did not comply with unsolicited consumer agreement laws, which require any door-to-door sales approaches to inform prospective customers about their rights to cooling off periods and the need to provide customers with copies of any sales agreements.
Vic Solar had operated using this sales model from mid-2014 and had entered into an estimated 4,300 sales contracts until it went into administration in November 2019.
The company had attempted to argue that it was not responsible for the conduct of the third-party sales agents, however the federal court ruled that it was.
The court also found that the company had used the Clean Energy Council’s logo in advertising material, and that this had falsely represented Vic Solar as being “affiliated with, or approved by, the Clean Energy Council.”
While Vic Solar had been a member of the Clean Energy Council, it was not an Accredited Solar Retailer – raising additional issues where systems installed by the company would be ineligible to state solar rebates.
The federal court ruled that Vic Solar had breached a total of 10 provisions within the Australian Consumer Law, and that the company’s director, Sunny Srinivasan, was directly knowledgeable of at least some of the breaches.
No representatives of the company appeared before the court to receive the judgement and it appears that neither Vic Solar or its director, have engaged legal representation.
Action was taken on behalf of affected customers by Consumer Affairs Victoria, who commenced proceedings in the federal court. Consumer Affairs Victoria said the decision was a warning for any businesses considering using unconscionable sales tactics.
“Businesses cannot avoid responsibility for dodgy sales practices by using lead generators,” director of Consumer Affairs Victoria, Nicole Rich, said.
The court will reconvene to decide on what action will be undertaken by Vic Solar and its director based on the judgement, following input from both the company and Consumer Affairs Victoria.
Consumer Affairs Victoria advised prospective customers for solar panels to be wary of businesses using aggressive sales techniques, including offering substantial discounts for agreeing to purchase products immediately, and withholding information about cooling off periods and sales documentation.