Unsolicited sales practices
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The ACL includes a single national law covering unsolicited sales practices, including door-to-door selling, telephone sales and other forms of direct selling that do not take place in a retail context.
The unsolicited consumer agreements law in the ACL contains the following key rules:
supplier obligations about the way in which consumers are approached;
supplier disclosure obligations about making contracts;
consumer rights, including a 10-day cooling-off right and the right to terminate a contract after the cooling-off period in various circumstances; and
supplier obligations about post-contractual behaviour.
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Section 69(1) of the ACL provides that an unsolicited consumer agreement has four elements:
The agreement must be for the supply, in trade or commerce, of goods or services to a consumer.
The agreement must have resulted from negotiations between a dealer and the consumer either in person (at a place other than the supplier’s place of business) or by telephone.
The consumer must not have invited the dealer to contact them for the purpose of entering into negotiations to supply goods or services.*
The total price paid or to be paid under the agreement is over $100 or cannot be determined at the time the agreement is made.
* In relation to the third element, an invitation to quote a price for a good or service is not taken to be an invitation to enter negotiations (ACL s 69(2)). Also, a consumer who provides their contact details other than for the predominant purpose of entering into negotiations, or contacts the dealer in connection with an unsuccessful attempt by the dealer to contact the consumer, is not taken to have invited the dealer to enter negotiations (ACL s 69(1A)). This provision overcomes a loophole where consumers are taken to have invited a salesperson to visit them in their home, even where the invitation was engineered by the seller (e.g. when consumers give their contact details to the seller for another reason, such as a competition entry form filled out at a shopping centre). The Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 (Cth) amended the ACL to clarify that unsolicited agreements may be made in a public place, even though a consumer has not invited the dealer to come to that place. This overcomes some court decisions that found that the definition of unsolicited consumer agreement would not cover sales in a public place.
A dealer can be, but need not be, a supplier; however, a supplier will be liable for the actions of a dealer in circumstances where the dealer is not the supplier (ACL ss 71, 77).
There is also a rebuttable presumption (taken to be true unless proved otherwise) that an agreement or a proposed agreement is an unsolicited consumer agreement (ACL s 70).
Obligations and rights
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The ACL sets out the permitted hours for calling on (as opposed to telephoning) a consumer: Monday to Friday, 9 am to 6 pm and Saturday, 9 am to 5 pm. Dealers are prohibited from calling on a consumer on a Sunday or a public holiday. The permitted hours specified in the ACL are default times and may be varied by individual states and territories by regulation under their respective application laws (ACL s 73).
A dealer who calls on a consumer must, prior to commencing negotiations, clearly advise their purpose for calling, and provide information about their identity (ACL s 74).
A dealer who calls at any premises must leave immediately if so requested by the occupier, any person acting with the occupier’s authority, or the prospective consumer. If such a request is made by the prospective consumer, that consumer must not be contacted for a similar purpose for at least 30 days after the request was made, but only in relation to that supplier (ACL s 75).
The Federal Court has held that a clearly displayed ‘do not knock’ sign amounts to a request to leave under the ACL (s 75).
Prior to making an agreement with a consumer, a dealer must give the consumer information about:
the consumer’s right to terminate the agreement during the termination periods; and
the way in which the person can exercise that right (ACL s 76).
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The ACL sets out the express disclosure obligations and other obligations about the making of agreements. A dealer must give the consumer either:
if the agreement was made in person – a copy of the agreement after the agreement has been signed by the consumer; or
if the agreement was made by telephone – a document evidencing the agreement,
within five days after the agreement was made (or a longer period agreed by the parties). This document can be given personally, by post or, with the consumer’s consent, by email (ACL s 78).
There are also formal requirements for a valid agreement. The documents that are required to be given to the consumer must comply with the following requirements:
it must be printed clearly or typewritten, setting out the full terms of the agreement, the total consideration and postal or delivery charges;
on the front page, it must have a notice advising of the cooling-off period;
it must be accompanied by a notice that the consumer can use to cancel the agreement;
it must state the full name, business address, email address and fax number of the supplier; and
it must be transparent (ACL s 79).
If an agreement was made in person (i.e. not over the telephone), the agreement must comply with additional requirements:
it must be signed by the consumer; and
if it is signed by a person on the supplier’s behalf, it must state that person’s name, business address and email address (ACL s 80).
If there are any amendments to the agreement, they must be signed by both parties (ACL s 81).
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The ACL contains express consumer rights, including a 10-day cooling-off right and the right to terminate an agreement after the 10-day cooling-off period in various circumstances. It also contains provisions outlining how consumers may exercise their termination rights and the effect of termination.
Consumers have a right to terminate the agreement during four time periods:
The consumer can cool off on their decision to enter into the agreement within 10 business days.
If the supplier contravenes its obligations relating to the permitted hours for negotiation, disclosure of purpose and identity, or ceasing to negotiate on request, the consumer can terminate the agreement within three months.
If the supplier contravenes its obligations relating to informing the consumer of the cooling-off period or the required contents of an unsolicited consumer agreement, the consumer can terminate the agreement within six months.
The consumer can terminate the agreement within a period stated by the agreement (ACL s 82).
A consumer can terminate the agreement in each of the circumstances outlined above by giving oral or written notice of termination to the supplier by using:
the termination notice that the consumer is required to be given; or
another form of written notice, regardless of its form or content.
A consumer can give the supplier written notice personally or by post, fax or email (ACL s 82). A consumer needs to produce evidence to prove that they have sent a written notice of termination.
An agreement that is terminated is deemed to have been rescinded by mutual consent and any related contract or instrument is void. The agreement is terminated even if the supplier has not received the notice of termination, or the consumer has used or consumed the goods and services (ACL s 83).
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A supplier must not supply goods or services to a consumer under an unsolicited consumer agreement or accept or require any payment during the 10-day cooling-off period (ACL s 86).
Goods can be supplied under an unsolicited consumer agreement within the 10-day cooling-off period if the total price payable for the goods under the agreement is $500 or less (Competition and Consumer Regulations 2010 (Cth) reg 95).
If an unsolicited consumer agreement is terminated:
the supplier must immediately return or refund any money or payment; and
the consumer must return to the supplier any goods that the consumer has not already consumed, or notify the supplier of the place where the supplier may collect the goods.
If the supplier does not collect the goods within 30 days after termination of the contract, the goods become the property of the consumer (ACL s 85).
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The Telecommunications (Telemarketing and Research Calls) Industry Standard 2017 (‘Standard’), which regulates the conduct of calls offering/advertising goods or services, sets out standards in four areas:
The times when a telemarketer may call a consumer.
Specific information a telemarketer must provide during a call.
Termination of calls.
Telemarketers to enable calling line identification.
For example, the Standard provides that telemarketing calls are prohibited:
before 9 am and after 8 pm on weekdays (8:30 pm for research calls);
before 9 am and after 5 pm on Saturdays and Sundays (research calls only); and
on Sundays (other than research calls) and national public holidays.
The ACL does not duplicate or overlap with the Standard or the Do Not Call Register Act 2006 (Cth) in respect to the conduct of telemarketing calls. The Act, which came into effect in 2007, enables consumers to join a ‘do not call’ register to opt out of receiving certain telemarketing calls (for more information, or to join the register, go to www.donotcall.gov.au). However, the requirements of the ACL concerning consumers’ and suppliers’ rights and obligations under agreements formed through telemarketing calls, such as cooling-off periods, will apply.
Unsolicited sales practices
Chapter: 7.2: Consumer protection laws
Contributor: Stephen Nowicki, Director of Legal Practice, Consumer Action Law Centre
Current as of: 1 September 2024
Law Handbook Page: 623
Next Section: Pricing
