Vulnerable Australians falling victim to high-pressure solar panel sales tactics, amid calls to ban door-knocking
Vulnerable Australians, including pensioners, are being signed up to overpriced solar deals, with some being charged almost double what their system is worth.
Jon Russell, from Murrurundi in New South Wales, had a salesman from a company called Grand Group visit his home last year.
Mr Russell is the full-time carer for his friend of 14 years, Lisa Smit, who lives with multiple medical conditions and is unable to work.
They put a modest solar system on their home in 2016, before being told by a salesman last year they could save more money if they upgraded.
“With [Lisa’s] medical issues, we run air conditioners 24/7,” Mr Russell said.
“The power bills were quite high, so we decided to go and get some more panels.
“During the day [the panels] pay for the power we use, which is fabulous.”
Mr Russell and Ms Smit were signed up to an additional 3.3 kilowatt system in January last year.
Mr Russell said the paperwork given to him did not properly detail how much the system would end up costing them overall.
“Had we known what we know now, we would have shown the guy the door,” Mr Russell said.
They are now paying $103 a fortnight for four years, a total of $10,500 through finance company Brighte Capital.
It is more than double the going rate for a similar system sold by other retailers.
“He was making it sound like we were getting a great deal, you know,” Mr Russell said.
“These Seraphim panels, [they’re] supposed to be very, very good panels and much better than the ones we had on the original system.”
‘He took advantage of us’
The ABC checked the price of their system with three different installers, who all said it would be worth a maximum of $4,500 to $5,000.
Mr Russell admitted he did not know how much they would end up paying for the system.
He did not realise he was being overcharged until he spoke to his neighbour Russell Griffiths, who was approached by a different company earlier this year.
“I feel he’s been ripped off and I just do not like seeing people being taken advantage of. It’s really that simple,” Mr Griffiths said.
After the discussion with his neighbour, Mr Russell asked for a copy of his contract and called a company he had seen advertised on television, to check their prices.
“We found out later that we got ripped off, basically,” Mr Russell said.
“The Sydney company said he could have done the job for $3,500 to $4,000 max, whereas he charged us $10,500.
“The fact that we were pensioners and to a certain extent naive, he took advantage of us.”
Mr Griffiths also had a doorknock from a different company, Solar Experts Australia, in April this year.
He said the salesperson encouraged him to buy additional panels using finance with Brighte Capital.
“They knew that I was receiving [the] age pension and I merely confirmed that,” Mr Griffiths said.
Mr Griffiths said he understood the 6.6kw system would cost $5,100, but when he later received the paperwork, it showed he would be paying $10,900.
He immediately cancelled the contract. But he was worried other pensioners may have been signed up.
“These people should be aware that they’re fighting the wrong person,” he said.
“I can easily understand how people without the smarts [could] so easily get sucked in. It’s a real worry.“
BNPL company begins ‘review’
Brighte Capital told the ABC: “Customers should not pay more for their purchase because they have chosen to use a Brighte zero per cent interest payment plan.”
“Brighte has zero tolerance for any vendor misconduct and manages this through the Code of Conduct, contractual arrangements, customer complaint channels, a rigorous accreditation process and an ongoing review and monitoring program,” the company said in a statement, while confirming it had commenced its own review into the matter.
“As a financier, Brighte does not set the pricing or commission structures of any third parties.”
Solar Experts Australia told the ABC Mr Griffiths’s system was worth $7,500, and after he complained, it told him he could buy it outright for $5,900.
The company said it did not target pensioners and had many happy customers.
Grand Group, the company that sold Mr Russell and Ms Smit their system, said it used independent contractors who were paid a commission, in line with market rates.
In Mr Russell and Ms Smit’s case, it said a salesman received $4,180 in commission, and the overall cost of the system was similar to other companies’ prices.
The company said at no time was it or its contractors advised Mr Russell was on a carer’s pension.
Grand Group also said inquiries were made to ensure Mr Russell and Ms Smit could afford the contract and it had not received a complaint about their finance arrangement.
Consumer advocates call for change
Last month, the Clean Energy Regulator (CER) released its long-awaited review of the rooftop solar sector.
The review recommended an overhaul of the way retailers and installers were accredited.
But it stopped short of making any recommendations about sales practices or buy now, pay later finance.
“They should have gone further in relation to addressing the aggressive upfront sales and they should have recommended that buy now, pay later be regulated, or any form of finance that’s being used to finance solar contracts,” said Karen Cox from the Financial Rights Legal Centre.
Ms Cox said she saw a significant number of cases in which consumers had no idea how much their solar panels would actually cost them.
“There’s usually an enormous discrepancy between what they think they’re paying for the solar system and the total amount of the finance,” she said.
“So in some examples, we’ve seen $5,000 become $11,000 or $13,000 becomes $20,000.
“There is no assessment done of the person’s capacity to pay.”
She said often people were told of the weekly or fortnightly repayments, which sounded affordable, but not how much the finance would cost in the long run.
“They don’t realise how long the contracts will go on for and therefore the total cost,” Ms Cox said.
She has long argued buy now, pay later contracts should be regulated just like normal credit such as a small loan with a bank.
She also wants a national ban on door knocking.
“At the minimum, the federal government should follow Victoria and ban unsolicited selling in relation to solar systems,” Ms Cox said.
Energy Minister Angus Taylor was not available for an interview.
The Clean Energy Regulator’s Mark Williamson said its recommendations would help to stamp out unscrupulous operators.
“Our legislation is about supporting renewable energy, additional renewable energy and the carbon emissions reduction that delivers, so we can’t simply ban door knocking,” he said.
“Buy now, pay later has been recently extensively reviewed by the Australian Competition Tribunal and by a federal parliamentary enquiry.
“At this stage, there are no major changes being proposed out of that. We’ve suggested continuing to monitor it.”
A key change is that solar retailers and installers will now have to sign a written statement that guarantees the performance of the system they’re selling.
“If they don’t deliver what the consumer should be delivered, they will be exited from our scheme,” he said.
“That will make it easy for the consumer bodies to take enforcement action against those unscrupulous retailers.”
The Australian Finance Industry Association (AFIA) — which represents buy now, pay later companies — said its industry code had strong consumer safeguards.
“Under the BNPL Code, all customers are checked – upfront checks, ongoing checks, to ensure the product is suitable,” AFIA chief executive officer Diane Tate said.
Ms Tate said consumers should not pay more for a product if they use buy now, pay later.
Installer frustrated with door knockers
Tasmanian solar installer Adrian Luke said door knockers and finance companies were a major problem for the industry.
“When the door knockers are busy, we’ll get three to six calls a day,” Mr Luke said.
“A lot of those calls are from, say, the children of elderly people and they go, ‘look, mum signed up for something or dad signed up for something, can you come and have a look?’”
“We find that they’ve signed up for a product that (costs) 100 per cent more than what that product is actually worth.
“They’re picking on the vulnerable, the elderly — and in Tasmania, we have an ageing population.”
Mr Luke said the industry body, the Clean Energy Council (CEC), was too soft on its members.
“The Clean Energy Council runs an approved solar retailer programme,” Mr Luke said.
“Most of us in the industry realise it’s a sales and marketing tool that doesn’t actually have any teeth.”
But CEC chief executive Kane Thornton said his organisation took strong action against those doing the wrong thing.
“This year alone, there have been some 300 complaints received by the Clean Energy Council,” he said.
“Every one of those are reviewed and investigated, and over a quarter of those have resulted in some level of action.”
Mr Thornton said consumer organisations and the Australian Securities and Investments Commission were the right bodies to be monitoring the sector.
“We have supported and encouraged greater transparency in terms of buy now, pay later products and services to make sure ultimately that what’s being provided to the customer is transparent,” he said.
“And we’ve seen some improvements already in that area.”
A spokesman for the Australian Securities and Investments Commission (ASIC) said consumers should closely check the terms of any financial agreement.
“And, more importantly, to seek a second opinion of assurance from someone you trust,” he said.
“This applies not just in the solar industry, though we are aware of issues there, but generally. If you feel you are being rushed to agree, don’t.”
Gold Coast woman mis-sold system
Even one of Australia’s biggest energy companies — Origin Energy — has been accused of poor sales practices.
Paula Searle is the carer for her husband Jaysen, who was badly injured in a cycling accident in 2017.
Ms Searle said when they moved house in 2019, her priority was to get solar.
“Jaysen’s bed runs 24/7 and the air con, the fans go, vaporisers, go. Everything’s electricity, and I can’t afford (that) being on a pension,,” Ms Searle said.
Ms Searle said she explained to the salesman that she wanted a modest system she could pay off comfortably.
“It was like 50, 60 bucks a month and pay it off in five years,” she said.
“That’s what I was going for and that’s what I asked for.
“They came back to do it (install the panels) about two or three weeks later, and they put something else on my house and it was a bigger system.”
When she asked to see the paperwork, she could see that she’d been signed up to a Solar Flex, a finance arrangement Origin offered at the time.
“I got a system worth $10,000, and it was about $120 a month and it was (for) 15 years.”
Ms Searle said she was “really cranky” with Origin, and eventually negotiated a payment plan, but that she still owed about $7,000 on the panels.
“I’ve just got to get rid of it, it’s another bill that I can’t do,” she said. “I said, ‘look, I just need to pay, just let me pay it off because I can’t keep paying Solar Flex for 15 years, it’s just too expensive’.”
An Origin spokeswoman said the company was trying to resolve the matter.
“It’s really important to us that we deliver tailored solutions that meet our customer’s individual needs and that customers understand what they are buying before making any commitments,” the spokeswoman said.
“It appears we didn’t meet our own standards in this particular instance. This is disappointing and we are seeking to resolve the matter with the customer.”
Ms Searle said she didn’t want anyone else to end up in a similar situation to her.
“It’s just too much money to be throwing away for something that is not even getting the right product for, it’s just not right. It’s just not fair.”