Don't fall foul of unsolicited consumer legislation
In brief: Are you involved in telemarketing? If so, you could be one of the many businesses falling foul of the unsolicited consumer legislation – even if you don't engage in direct marketing.
What you need to know:
- The Australian Consumer Law provides consumers with protections that relate to unsolicited sales practices, such as door-to-door sales and telemarketing.
- Even if a consumer has invited your business to call or attend their house for a particular service, you may face penalties if you attempt to sell them another service and you don't comply with unsolicited consumer agreement laws.
- Consumer Law has specific guidelines as to what is included under the unsolicited consumer agreement laws.
Below are three key facts that every business needs to be aware of when it comes to door-to-door sales and telemarketing practices.
Fact 1: What is an unsolicited consumer agreement?
The test for an unsolicited consumer agreement includes the following:
- the negotiations are not at the supplier's place of business or are made by telephone (whether or not they are the only negotiations that precede the making of the agreement); and
- the consumer did not invite the dealer to come to that place, or to make a telephone call (even if they did for an alternate good or service); and
- the total price paid or payable by the consumer under the agreement is more than $100 (if the price is ascertainable at the time of the agreement).
- it is not a business-to-business transaction.
An example of what is an unsolicited consumer agreement:
- A consumer enters a competition and you call them to sell separate goods or services.
- You call a customer in relation to one product and without prompting or invitation from the customer you attempt to sell them a completely separate and distinct product.
An example of what is not an unsolicited consumer agreement:
- You contact a customer to renew an existing contract.
- The customer is invited to a party where it is clear before they attend that they are being sold to and there are more than three people in attendance.
Fact 2: Before negotiations commence
Prior to negotiating for the unsolicited consumer agreement the dealer must inform the customer of:
- clearly advise the person that the dealer's purpose is to seek the person's agreement to a supply of the goods or services concerned; and
- clearly advise the person that the dealer is obliged to leave the premises immediately on request; and
- provide the person with information relating to the dealer's identity.
Before an agreement is reached the dealer must inform the consumer:
- the person's right to terminate the agreement during the termination period; and
- the way in which the person may exercise that right.
Fact 3: Once the agreement is made
Once an agreement is made:
- A copy of the agreement must be provided (or if by telephone the information provided over the phone and then in writing).
- The front page of the agreement must prominently inform the consumer of the consumer's right to terminate the agreement.
- The supply and payment for the goods and services are not to be made within 10 days of entering into the agreement. The exception is if goods less than $500 can be supplied immediately, but the consumer can still cancel the agreement within the 10 days.
Companies should take care to ensure that their salespeople are adequately trained to comply with Consumer Law. If you encourage your staff to "up sell" during telephone interactions with consumers, you need to ensure that all agreements comply with Consumer Law. Failing this your business could be found at fault even if you do not usually engage in unsolicited telemarketing and door-to-door sales.
If in doubt, you should seek legal advice as to whether your business practices fall within the unsolicited consumer agreement laws, as the Consumer Law has specific guidelines as to what is included. This article does not cover every situation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.