An agreement is considered to be unsolicited when:

• a supplier or salesperson approaches or telephones a consumer without the consumer having invited the contact;
• negotiations take place over the telephone, or in person at a location other than the supplier's premises; and,
• the total value of the agreement is more than $100.00, or the value was not ascertainable at the time the agreement was made.

In the event of a dispute the onus is on the business to prove that an agreement is not an unsolicited consumer agreement.

The Australian Consuemr Law includes a number of requirements in relation to unsolicited consumer agreements.  Most notably, the law grants a cooling-off period of 10 business days to consumers who are offered such an agreement.

It should be noted that the Corporations Act 2001 (Cwlth) prohibits unsolicited hawking of securities, certain financial products and managed investment products.

• Examples of unsolicited consumer agreements.
• Permitted hours for contacting consumers.
• Requiements when calling on consumers.
• Requiremetns for telemarketing and other unsolicited marketing approaches.
• Cooling-off and termination requirements.
• What happens to goods or services after the consumer cools-off?
• Supplier responsibility for failing to comply.

Examples of unsoclicited consumer agreements.

Some typical examples of situations that may lead to an unsolicited agreement being made are:

• door-knocking households and offering to sell products or services, or inviting consumers to switch to a different service provider;
• telphoning consumers and offering to sell products or services;
• approaching consumers in the common area of a shopping centre and offering to sell products or services; and,
• leaving a missed call message on an answering machine for the consumer to respond.

The following stituations may also be considered unsolicited approaches:

• A consumer completes an entry form to a competition that is sponsored by a supplier, and one of the conditions of entry is that the consumer agrees to be contacted by the supplier about new product information.  In this case the consumer has not given their details as an invitation for the supplier to enter into negotiations.
• A consumer asks a supplier to provide a quote.  Again, the consumer has not invited the supplier to enter into negotiations, so if the supplier does attempt to negotiate with the consumer at the time of providing the quote, or later contacts the consumer to negotiate a deal, then a resulting agreement would be considered unsolicited.  Where a supplier leaves a quote with a consumer for deilberation and the consumer then approaches the supplier to accept or negotiate different terms, then this would not be considered an unsolicited consumer agreement.

Permitted hours for contacting consumers.

Telemarketing phone calls are specifically regulated under the Do Not Call Register Act 2006 and associated telemarketing standards.  Telemarketing calls and fax marketing cannot be made:

• on a Sunday or puiblic holiday;
• weekdays before 9am or after 8pm; and,
• on a Saturday before 9am or after 5pm.

A salesperson must not call upon a consumer to negotiate a deal:

• on a Sunday or public holiday;
• weekdays before 9am or after 6pm; and,
• on a Saturday before 9am or after 5pm.

However a supplier or agent may visit a consumer at any time if the appointment has been made with the consumer's consent.

Requirements when calling on consumers.

A salesperson must explain upfront the purpose foprtheir visit and provide identification.  Until 1 January 2012, a salesperson can choose to comply with the identification requirements of either:

• the Australian Consuemr Law; or,
• the relevant state or territory law that applied prior to the Australian Consumer Law.

After 1 January 2012 they must complay with the Australian Consumer Law.

A salesperson must explain that they are required to leave upon the consumer's request.  When a salesperson is told to leave, they must not contact the consumer again for at lkeast 30 days about the particular product or service they were selling during the visit.  However a salesperson can visit the consumer again about the sale of goods by a different supplier.

An agreement signed by a salesperson on teh supplier's behalf must state:

• that the salesperson is acting on behalf of teh supplier;
• the salesperson's full name;
• the salesperson's business address or residential address, not a PO box; and,
• the salesperson's email address if they have one.

Until 1 January 2012 a saleperson can choose to comply with the contact details requirements of either the:

• Australian Consumer Law; or,
• the relelvant state or teerritory laws that applied prior the Australian Consumer Law.

After 1 January 2012 they must comply with the Australian Consumer Law.

Requirements for telemarketing and other unsolicited marketing approaches.

Consumers must be given a written copy of the agreement:

• as soon as it has been signed, for agreements made through face-to-face selling; or,
• within 5 business days, or longer if the consumer agrees, for agreements negotiated over the telephone.

The agreement document can be provided in person, by post or electronically, if the consumer agrees.

The agreement document must:

• include the following text on the front page:
  • 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.
• be transparent, expressed in plain language, legible and clear;
• be printed, although any changes may be handwritten and signed by both parties; and,
• be signed and dated by the consumer on the front page.

The agreement document must clearly state:

• the consumer's cooing-off period rights;
• the full terms of teh agreement;
• the total price payable, or how this will be calculated;
• any postal or delivery charges; and,
• the supplier's name, address, ABN, ACN, email and fax etc.

Cooling-off and termination requirements. 

Salespeople must inform consumers of their cooling-off rights.  The agreement document must be accompanied by a notice that may be used to terminate the contract.  This notice must include the supplier's details including:

• name and business address, not a PO box;
• ABN if they have one;
• ACN if they have one; and,
• fax number and email address, if they exist.

It is an offence to induce, or attempt to induce, consumers to waive their rights.  It is unlawful to include or rely on provisions that exclude, limit, modify or restrict:

• a consumer's right to terminate the agreement; and,
• the effect or operation of the Australian Consumer Law as it relates to unsolicited consumer agreements.

Consumers have 10 business days to reconsider an unsolicited consumer agreement, during which they can cancel the agreement without penalty.  This is called the cooling-off period.

For agreements negotiated over the telephone, the cooling-off period begins on the first business day after the consumer receives the agreement document.

For agreements that have not been negotiated over the telephone, the cooling-off period begins on the first business day after the agreement was made.

During the 10 day cooling-off period, the supplier must not accept any payment or supply any goods or services relating to the agreement.  Goods or services supplied during the cooling-off period are considered unsolicited goods.

Consumers may terminate an agreement up to 3 months after it is made, or the agreement documents are received if the agreement was made by telephone, if the sdalesperosn:

• visited 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 6 months if a salesperson:

• did not provide information about the cooling-off period;
• was in breach of any of the requirements for unsolicited consumer agreemetns, 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.

A consumer may terminate an agreement orally or in writing.  The termination date is considered to be the date on which the notice was given or sent by the consumer.  Once a consumer terminates an agreement, the agreement is void.  The notice is effective even if:

• written notice has been given, but the supplier has not received it; and,
• goods and services supplied have been wholly or partly consumed or used.

If a consumer cancels an unsolicited consumer agreement, then any related contract or instrument is also void, which means it is also effectively cancelelled.

When a consumer cools-off, the supplier must promptly return or refund to the consumer any money paid under the agreement or related contract.  A supplier cannot:

• take action against the consumer to recover any payments allegedly owed under the agreement; or
• place, or attempt to place, the consumer's name on any list of degfaulters or debtors.

What happens to the goods or services after a consumer cools-off?

The consumer must, within a reasonable time, return any goods that have not been consumed or tell the supplier whrer to collect them.

If a consumer has not taken reasonable care of the goods, the supplier can seek compensation for depreciated value.  The consumer does not have to pay compensation for normal use of the goods or circumstances beyond their control.

If the supplier does not collect the goods within 30 days, the consumer can then keep them.

If teh agreement is terminated after the cooling-off period and a service has already been provided, the consumer may have to pay for the service.  Obviously, the service can't be 'undone' once it has been provided.

Supplier Responsibilty for failing to comply

A supplier cannot enforce an agreement if the suppler's agent or salesperson has breached the law or unsolicited consumer agreement.  Both the suppleir and salesperson may be liable for the breaches.

Suppleirs should ensure their sales agents and other representatives are fully aware of their legal obligations when using unsolicited marketing approaches.

Top