Unsolicited consumer agreements - door to door sales and telemarketing
The ACL includes rules on unsolicited sales practices, including door to door selling, telemarketing and other forms of direct selling.
With unsolicited door to door or telemarketing, the ACL allows a 10-day cooling off period for consumers generally to change their mind and cancel the contract. They can also cancel the contract within three or six months if the supplier has not met certain obligations.
The ACL also sets out the disclosure obligations when making an unsolicited agreement. The business must:
- provide a copy of the agreement to the consumer after it is signed, if the agreement is made in person
- provide a document evidencing the agreement to the consumer within five business days after the agreement is made (or a longer period agreed by the parties), if the agreement is made by telephone. This document can be delivered personally, by post or, with the consumer’s consent, by email.
Permitted hours for telephone sales are regulated under the Do Not Call Register Act 2006 and associated telemarketing standards. To find out more about the Australian Do Not Call Register visit www.donotcall.gov.au.
The ACL provides that when door knocking, sales agents cannot visit consumers:
- on Sundays or public holidays
- before 9 am or after 6 pm on weekdays
- before 9 am or after 5 pm on Saturdays.
A salesperson can visit at any time if an appointment has been made. The appointment must be arranged by telephone or in writing, not in person.
Door to door salespeople are also required to:
- clearly explain the purpose of the visit and produce identification
- explain to consumers their cooling off rights
- leave the premises upon request.
A request to leave the premises can be either verbal or written. A ‘Do Not Knock’ sign is a request to leave the premises. If a salesperson sees a ‘Do Not Knock’ sign, they should leave the premises immediately.
Example: A door to door salesperson travels between suburbs selling alarm systems. The salesperson sells several alarm systems but does not provide customers with a copy of the agreement. Three days after entering into an agreement a customer wishes to cancel the agreement and is told this is not possible.
This would be a breach of the ACL as customers must receive a copy of the agreement and are entitled to a 10-day cooling off period during which they can cancel the agreement for any reasons whatsoever, including that they have changed their mind.
Real case study: The Federal Court ordered two companies, by consent, to pay a total of $1.55 million for illegal door to door selling practices. The breaches included a failure to leave the homes of consumers when requested.
The Court’s decision confirms that consumers can use a sign, such as a ‘Do Not Knock’ sign, to request uninvited salespeople to leave their premises and do not need to meet the salesperson face-to-face to ask them to leave.
Case law: Federal Court of Australia - [2012] FCA 1357
Media release: Energy retailer ordered to pay $1.5 million for illegal door-to-door sales practices
Case law: Federal Court of Australia - [2013] FCA 1030
Media release: Court confirms salespeople must not ignore ‘do not knock’ signs
The provisions of the ACL relating to misleading and deceptive conduct also apply to all forms of direct selling. In the case of door to door selling, success usually depends on signing up consumers on the spot. In this situation businesses must ensure their sales staff or contracted sellers do not stray from truthful claims to make a sale.
Related information: Door-to-door & telemarketing sales
Related publication: Sales practices—a guide for businesses and legal practitioners
Legislation: Australian Consumer Law Part 3-1 Division 2
Legislation: Australian Consumer Law Part 3-2 Division 2