Other rules that salespeople must follow
Salespeople must identify themselves
A telemarketer, door-to-door salesperson, or salesperson approaching a consumer in a public place must tell the consumer:
- their name
- the name and address of the business they represent
- why they are phoning or visiting.
Consumers must be given a sales agreement
If the consumer agrees to buy a product or service, they must receive a written sales agreement. This is a type of contract.
The salesperson must provide this agreement:
- within 5 business days after the phone call, or
- straight after signing if the consumer signs in person.
The sales agreement must be written in language that is easy to understand and read. It should be typed, not handwritten, although changes can be handwritten and signed.
The sales agreement must include the following information:
- full terms and conditions of the agreement
- total cost (including any GST), or details of how the cost will be calculated
- any postal or delivery charges
- the salesperson’s name and contact details
- the business’s physical address, email, fax number (if they have one), and Australian Business Number or Australian Company Number
- cooling-off information.
To be a valid contract, the sales agreement must be signed and dated on the front page by both the consumer and the salesperson.
Don’t sign a sales agreement without reading it in full first. You don’t have to agree to anything on the spot.
Cooling-off information must be in the sales agreement
The sales agreement must have information about the cooling-off period, and a form the consumer can use to cancel during the cooling-off period.
The following notice must be on the front page of the agreement:
Important notice to the consumer
You have a right to cancel this agreement within 10 business days from and including the day after you signed or received this agreement.
Details about your additional rights to cancel this agreement are set out in the information attached to this agreement.
Certain rules must be followed during the cooling-off period or it extends
During the cooling-off period, the seller can supply products the consumer has agreed to buy, as long as they cost less than $500 (including GST). However, they can’t:
- supply any services, except electricity, gas or emergency repairs
- take payment for any products or services, except for electricity, gas or emergency repairs.
If a salesperson breaks the rules about telemarketing or door-to-door sales, the cooling-off period is extended.
The cooling-off period becomes 3 months if the salesperson:
- phones or visits the consumer outside the allowed hours
- doesn’t give their name or the name and address of the business they represent
- doesn’t say why they are calling or visiting.
The cooling-off period becomes 6 months if the salesperson:
- doesn’t tell the consumer about the cooling-off period
- doesn’t give the consumer a written copy of the sales agreement
- doesn’t include information and documents they are required to include in the agreement, such as the form that may be used to cancel the agreement
- supplies products or services during the cooling-off period (except for electricity, gas, emergency repairs and products that cost less than $500).
Businesses mustn’t engage in unfair business practices
The Australian Consumer Law also protects consumers from unfair behaviour by businesses.
It’s against the law for businesses to engage in these practices in how they promote, sell and deliver products and services, what terms they use in
contracts, and how they take payment from consumers.
It’s also against the law for a business to use physical force, coercion or undue harassment on consumers.
See unfair business practices for more information.
Uninvited sales of financial products and services generally isn’t permitted
Generally, it is against the law for salespeople to sell financial advice or products, such as insurance, at a consumer’s door or via the phone unless the consumer invites the contact.
You can report this conduct to Australian Securities and Investments Commission (ASIC).
Change of mind after making a purchase
There is a cooling off period for some purchases
If a consumer buys a product or service from a telemarketer, a door-to-door salesperson, or a salesperson that has approached them in a public place, they can change their mind and cancel the sales agreement for any reason without being charged anything.
They have 10 business days to do this, starting the first business day after they sign or receive the agreement document. This is known as a cooling-off period.
The cooling-off information must be in the sales agreement.
If the salesperson doesn’t follow certain rules, the cooling off period extends for a longer period of time.
The cooling-off period only applies to unsolicited agreements
This right to a cooling-off period is only for
unsolicited consumer agreements, that is products and services sold through methods like telemarketing and door-to-door sales.
When a consumer buys a product from a store or website, there is no automatic right to a cooling-off period. The business is not required to give a refund if the consumer simply changes their mind.
How to cancel during the cooling-off period
To cancel a sales agreement during the cooling-off period, the consumer simply needs to tell the seller they want to cancel. They can do this over the phone, in person, by post, email or fax, or using the form provided in the sales agreement.
The sales agreement is cancelled from the day the consumer tells the seller they want to cancel.
When a consumer cancels a sales agreement during the cooling-off period, the seller must immediately return any money the consumer has paid. If there is a credit arrangement, the seller must cancel it.
Even if the consumer has used the product, they still have the right to cancel the agreement. However, the consumer must either return the product —or what is left of it— to the seller within a reasonable time after cancelling, or let the seller know where they can collect it from. If the seller does not collect the product within 30 days of the consumer doing this, the consumer can keep it.
Consumers should take reasonable care of the product —or what is left of it— before returning it or while waiting for the seller to collect it. If they don’t, the seller can seek compensation for the loss in value of the product, except for any loss caused by normal use or things beyond the consumer’s control.
If the consumer wants to cancel the sales agreement during the cooling-off period, the seller must not pressure them to change their mind.
