Cooling off

If you agree to an unsolicited agreement you have 10 business days to reconsider, during which you can cancel the agreement without penalty. This is called the cooling off period.

If the agreement was negotiated in person, the cooling off period begins on the first business day after the agreement was made. If the agreement was negotiated over the telephone the cooling off period begins on the first business day after you receive the agreement document.

The cooling off period is extended to three or six months if the salesperson failed to meet certain obligations required under the law.

You may terminate an agreement up to three months after it is made if the salesperson:

visited you outside of the permitted selling hours;
did not disclose the purpose of the visit;
did not produce identification; or
did not leave the premises upon request.

The period is extended to six months if a salesperson:

did not provide you with information about the cooling off period; or
was in breach of other requirements for unsolicited consumer agreements (such as failing to provide a written copy of the agreement or not including required information in the written agreement) or;
supplied goods or services during the cooling off period.

If you are unsure about the length of your cooling off you should contact the ACCC or your local consumer protection agency for further information.

Supplying goods or services during the cooling-off period

During the cooling-off period, a supplier must not:

supply any goods or services relating to the agreement
accept or require any form of payment.

However, during the cooling-off period an energy supplier can provide electricity or gas to premises not already connected to such services, or where there is already a connection but no supply.

Previous state and territory laws did not allow payment for services during the cooling-off period, and some also did not allow supply of goods during this time.
To give businesses time to adjust to the ACL, businesses may, for a limited time, comply with previous state and territory laws relating to the payment and supply of goods or services during cooling-off periods for door-to-door trading.

This means that, until 31 December 2011:

in Victoria and the Australian Capital Territory, businesses may receive payment for goods – but not services – during the cooling-off period
in New South Wales, businesses must not collect any fees during the cooling-off period for services supplied during that period
in Queensland, South Australia, Western Australia, Northern Territory and Tasmania, businesses cannot receive payment for goods or services during the cooling-off period – regardless of whether the agreement resulted from door-to-door trading or was negotiated by telephone. They must also not provide services during the cooling-off period.

If the supplier does not comply with the relevant state or territory provisions between 1 January 2011 and 31 December 2011, they must comply with the ACL.

See below for information on changes that commence on 1 January 2012.

Terminating the sale agreement during the cooling off period

You can terminate an unsolicited consumer agreement without penalty verbally or writing any time during the cooling off period.

If you notify the trader that you wish to cancel the sale agreement, then that agreement and any related agreements are cancelled as of the date you gave that notice.

For example, you agree to buy a $900 washing machine from a door-to-door trader, and also a separate contract for servicing the washing machine, costing $80. During the cooling off period you notify the trader that you wish to cancel the sale agreement to purchase the washing machine. By giving notice the trader must cancel both the sale agreement and the related service agreement.

You may incur penalties if you wish to just cancel the related agreement as these are not covered by the cooling off provisions. In the example above you may incur penalties if you wanted cancel only the service contract.

If you have made any payments, the trader must promptly return or refund any money paid under the contract or a related contract.

For goods bought on credit or finance, it is the supplier’s responsibility to contact the credit provider and arrange for cancellation.

What happens to the goods/services after you cool off?

You must, within a reasonable time, return any goods that have not been consumed or tell the supplier where to collect them.
If you have not taken reasonable care of the goods, the supplier can seek compensation for depreciated value.
You do not have to pay compensation for normal use of the goods or circumstances beyond your control.
If the supplier does not collect the goods within 30 days of termination, then you can keep them.

Waivers

Salespersons must not encourage you to waive your rights. Waivers are not permitted under the law and would have no effect in any case.

Next steps

For further information, contact the ACCC on 1300 302 502 or your local consumer protection agency. They can explain your consumer rights and options. Your local consumer protection agency may also be able to conciliate (help you negotiate with the seller).

The Do Not Call register

To avoid receiving unsolicited telemarketing calls and marketing faxes you can put your phone number on the Do Not Call Register, it is a secure database. For more information or to register your number, visit www.donotcall.gov.au or phone 1300 792 958.

Changes to the rules on unsolicited consumer agreements from 1 January 2012

As of 1 January 2012 a business will be able to immediately supply goods to a consumer during the cooling off period under an unsolicited consumer agreement if the agreement is worth $500 or less.

However, businesses cannot accept payment for such a good or supply services during the cooling off period under an unsolicited consumer agreement worth more than $100.

Cooling off and termination