A full bench of the Federal Court has ruled that the sales tactics of the Lux Vacuum group were “unconscionable” under Australian consumer law.
In a statement announcing the decision, the Australian Government said the Federal Court had decided that the consumer protection laws of the states and Commonwealth reinforce the recognised societal values and expectations that consumers will be dealt with honestly, fairly and without deception and unfair pressure.
The Full Federal Court declared that Lux had engaged in unconscionable conduct in relation to the sale of vacuum cleaners to three elderly consumers in their homes.
“This is a significant decision for the ACCC as it provides important clarity regarding the scope and operation of the unconscionable conduct provisions in the Australian Consumer Law,” ACCC Chairman Rod Sims said.
“In particular, the decision has important implications for conduct which occurs in breach of consumer protection legislation, particularly where this conduct involves vulnerable consumers.”
The Court also said “(t)he norms and standards of today require businesses who wish to gain access to the homes of people for extended selling opportunities to exhibit honesty and openness in what they are doing, not to apply deceptive ruses to gain entry”.
In its statement, the ACCC alleged that a Lux sales representative called upon five elderly women in their homes under the premise of a free vacuum cleaner maintenance check, and that each of the women was then subjected to unfair and pressuring sales tactics to induce them into purchasing a vacuum cleaner for a price of up to $2280.
“The Court’s decision represents a positive outcome for consumers and serves as a warning for businesses,” Sims said.
“The ACCC will continue to take enforcement action if it considers that companies have engaged in unconscionable conduct, particularly in cases involving vulnerable consumers and where there have been other breaches of consumer protection provisions of the ACL.”
A further hearing will determine if Lux will be required to pay any pecuniary penalties. Lux has not made any public statement since the court's decision.