We are often asked by consumers how they can check if the business or trader they are dealing with is legitimate.

Some consumers assume that all traders are legitimate because they are approved and monitored by the government, but this not true. While there are rules and regulations about setting up a business or company in Australia, authorisation to operate does not guarantee honesty. Besides, some traders may pretend to have authorisations or licenses that they do not have.

Business cards, registration numbers or some other form of identification does not necessarily prove that a business or trader is legitimate. This is particularly important if they approach you directly such as an unsolicited salesperson on your phone or at your door.

If you are in any doubt about the credentials of a business or trader that you are dealing with, do some research and verify any information they supply you with. If you can not satisfy yourself, it is better to deal with someone else.

Here are some tips that may help you get your research started.

Check if the company or business is registered

Companies, businesses and other traders must be registered before they can operate legally in Australia. While having the correct registrations will not guarantee that the company or business is totally genuine, it is a good start.

Companies

All Australian companies must be registered with the Australian Securities and Investments Commission (ASIC). Companies registered under the Corporations Act 2001 can conduct business throughout Australia without needing to register in individual state and territory jurisdictions.

The ASIC website has several registers that you can search for free, such as the National Names Index, which indexes Australian corporate and registered business names. It also includes some incorporated associations.

Businesses

If the business is not a company (such as a sole trader, a joint venture or a partnership), it will need to be registered in each state and territory where it operates. Each state and territory has its own office or agency which manages business registrations. Business registrations could be managed by your office of fair trading or consumer affairs organisation.
Search the National Names Index on the ASIC website (see above) or the Australian Government website, www.business.gov.au, using the ABN Lookup function. This function is useful if you are searching for a sole trader.

Check if the trader has all the right permits and licenses

Many companies, businesses, tradespeople and professional service providers need some sort of additional registration or license before they can practice their business. These sorts of licensing systems help industries maintain professional standards and encourage consumer confidence.

Registration boards can set minimum qualifications and standards that must be achieved before granting someone a license or registration. Disciplinary action can be taken by the government or industry board if someone with registration does not maintain the standard of service required.

For example, financial advisors and investment schemes must be approved and licensed by ASIC. Their details are kept on a public register that you can search through the ASIC website.

There are also special registrations and accreditation processes that apply to traders in other industries including health services, professional services, motor car dealers, builders, estate agents, funeral services and travel agents.

Check with your state or territory government, local council or an industry or professional association whether the company, business or trader that you are dealing with should be registered or have other permits for the type of work they are doing. Verify any information the trader gives you about their licenses.

Search the ACCC Consumer & business directory for contact details of a variety of agencies and organisations that can help you.

Check if the trader has any voluntary memberships

Many industries are represented by professional or trades associations. Membership of these types of industries is generally voluntary. Ask the trader you are dealing with if they belong to an association. If they claim that they do, ask them for the membership or license number. Contact the industry association yourself and verify the information the trader gave you.

Search our Consumer & business directory (see above) for contact details of a variety of professional or trades associations that can help you.

What other research can I do?

If you have doubts about a business or trader, don’t deal with them. Ask your family, friends, or neighbours if they can recommend a person or business. You could also contact an industry body or association for a referral.