- Dealing with typical situations
- Mobile trading and door-to-door selling
- Selling over the phone or door-to-door
Selling over the phone or door-to-door
If your business makes sales door-to-door or by using telemarketing there are rules about uninvited direct sale agreements that you should know about.
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What is an uninvited direct sale?
- you approach a consumer uninvited at their home, workplace or by phone, and negotiate to sell them goods or services; and
- the goods or services cost $100 or more (or the price is uncertain at the time of supply).
- a consumer provides you their contact details for one purpose (such as a competition entry) and as a result you contact them in order to sell other goods or services;
- a consumer responds to an unsuccessful attempt to contact them (such as returning a missed call or responding to a calling card);
- a consumer enters into negotiations with you after they receive an unsolicited quote or estimate.
Rules for uninvited direct sales
You must give consumers information when you are negotiating an uninvited direct sale.
- tell the consumer about their right to cancel the agreement within 5 working days and how to exercise that right - this must happen before the customer enters into the agreement
- provide the consumer with a written copy of the agreement when it is entered into. If the agreement is made over the phone the consumer must receive a written copy of the agreement within 5 working days.
The agreement must be clear and include specific information.
- in writing
- expressed in plain language so that it is easily understood
- legible and presented clearly.
- a clear description of the goods or services that are being supplied
- a summary of the consumer’s right to cancel the agreement
- the supplier’s name, street address, telephone number and email address
- the consumer’s name and street address.
- the date
- the total price to be paid under the agreement.
Consumers have a right to cancel
- immediately repay all the money paid by the consumer under the agreement;
- arrange to collect (or ask the consumer to return) any goods you've already supplied at your expense;
- if the services already supplied altered or damaged the consumer’s property you must reinstate the consumer’s property to its previous condition if they ask you to. You are not entitled to compensation for the services already supplied under the agreement.
When you can enforce an uninvited direct sales agreement
Example: A telemarketer calls Daniel offering a special price to switch his electricity supply services to another supplier for a 12 month period. The telemarketer doesn’t record Daniel’s address details correctly. As a result, Daniel doesn’t receive a copy of the written agreement within 5 days. Daniel eventually receives a copy of the agreement three weeks later but in the meantime has decided to stay with his existing supplier. The supplier failed to provide Daniel with a copy of the agreement in time so has not complied with the information disclosure requirements. The agreement would not be enforceable and Daniel could cancel at any time.
Do these rules apply to renewal agreements?
Tips for businesses
- implement a comprehensive training programme so staff and agents understand and carry out their legal obligations
- monitor staff performance to make sure they are complying with the law and to identify any issues
- check your sales agreements to ensure they contain all of the necessary information required by law.