> Business advice  > Selling to customers  > Unsolicited supplies and consumer agreements

On this page:

• What are unsolicited supplies?
• Can businesses provide goods or services to consumers who haven't requested them?
• If businesses provide unsolicited goods or services:
• A business must not send unsolicited credit or debit cards
• Examples of unsolicited consumer agreements
• Permitted hours for contacting consumers
• Requirements when calling on consumers (not telephone)
• Requirements for telemarketing and other unsolicited marketing approaches
• Cooling off and termination requirements
• If a consumer cools off or terminates
• Supplier responsibility for failing to comply
• Cancellation notice for unsolicited consumer agreement form (103 KB PDF file)

What are unsolicited supplies?

Unsolicited supplies occur when goods or services are supplied to a person who has not agreed to purchase or receive them.

It is important to note that it is an offence to demand payment for goods or services if the recipient has not ordered them.

It is an offence for a person to bill you for an advertisement you never authorised.





Can businesses provide goods or services to consumers who haven't requested them?


Businesses often provide goods or services to consumers as a way of exposing consumers to the brand, product or service. Examples of this are free product samples sent in the mail, or door knocking households and offering to clean their windows as part of a free product demonstration. In these cases there is no expectation that the consumer will have to pay for the goods or services.

However, it is an offence for businesses to demand payment for unsolicited goods or services.

For example, the Australian Consumer Law prohibits a trader from demanding payment for items, (such as books, magazines or DVDs) that have been posted to a consumer if that consumer never requested the items be sent.

Businesses must not issue an invoice for unsolicited goods or services supplied unless the invoice contains the required warning statement - “This is not a bill. You are not required to pay any money”. This warning statement must be the most prominent text on the document.

In the event of a dispute, the business operator would need to prove they have a legitimate right to demand the payment.



If businesses provide unsolicited goods or services:

• The recipient is not required to pay for the goods or services.
• The business is entitled to recover the goods within three months (called the “recovery period”). However, if the recipient advises the business in writing that they do not want the goods, then the recovery period is reduced to one month. The recipient cannot unreasonably refuse to allow the supplier to collect the goods during the recovery period.
• The recipient may be liable to pay compensation if they wilfully damage the goods during the recovery period.
• If the unsolicited goods have not been collected within the recovery period the recipient can keep the goods without any obligation to pay.
• However, the recipient is not entitled to keep the goods if the goods were not intended for them (e.g. the packaging was clearly addressed to another person).
• Recipients are not liable for any loss or damage resulting from a supply of unsolicited services.

For example:

A consumer arranges for a car repairer to replace the muffler on her car. When she returns to collect the car the repairer says the tyres and brake pads also needed replacing, so he made the replacements and added an extra $1200 to the bill. The work done in addition to replacing the muffler would be considered unsolicited and the consumer is not liable to make any payment for this. If the repairer had phoned the consumer for authorisation to replace the tyres and brake pads and the consumer agreed, then these components would not have been unsolicited.



If a business is billed for an advertisement they did not authorise

It is not uncommon for businesses to receive bills for the publication of advertisements (about the business) that have not been authorised by the business.

The Australian Consumer Law prohibits requesting payment for unauthorised entries or advertisements in publications.

If a person or business is invoiced for an unauthorised publication, that invoice must include the required warning statement - “This is not a bill. You are not required to pay any money”. This warning statement must be the most prominent text on the invoice.

The business must give written (and signed) authority before payment can be requested.

The authorisation document must specify:

• The details of the entry/ad.
• Name and address of the publisher.
• Charges that will apply.

In the event of a dispute, the person demanding payment would need to prove that the placing of the entry or advertisement had been authorised.




A business must not send unsolicited credit or debit cards

Generally, an issuer must not send unsolicited debit cards or credit cards (including store-branded credit cards and store account cards) to a person unless:

• The person has requested in writing the card; or
• The card is a replacement, renewal or substitution for a previous card and used for the same purpose.

Under the Australian Consumer Law, an item is considered to be a credit card if it is intended to be used to obtain cash, goods or services on credit.

An item is considered to be a debit card if it is intended to be used to access an account held by the consumer for the purpose of withdrawing or depositing cash or obtaining goods or services.

More information about unsolicited credit and debit cards is available in Regulatory Guide 201 from the Australian Securities and Investments Commission at www.asic.gov.au





What is an unsolicited consumer agreement?

An agreement is considered to be unsolicited when:

• A supplier/salesperson approaches or telephones a consumer without that consumer having invited this contact; and
• Negotiations take place over the phone, or in person at a location other than the supplier's premises; and
• The total value of the agreement is more than $100, 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 Consumer Law includes a number of requirements in relation to unsolicited consumer agreements. Most notably, the Australian Consumer Law grants a cooling-off period of 10 business days to consumers who are offered such an agreement.

It should also be noted that the Corporations Act 2001 prohibits unsolicited hawking of securities, certain financial products and managed investment products. More information is available from the Australian Securities and Investments Commission at www.asic.gov.au




Examples of unsolicited 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.
• Telephoning 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.
• Leaving a missed call message on an answering machine for the consumer to respond.

The following situations may also be considered unsolicited approaches.

• A consumer fills out 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 (such as measuring for blinds). 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 a quote, or later contacts the consumer to negotiate a deal, then a resulting agreement would be considered an unsolicited consumer agreement. If a supplier leaves a quote with the consumer for deliberation and the consumer then approaches the supplier to accept the quote or negotiate different terms, then this would not be considered an unsolicited consumer agreement.

Permitted hours for contacting consumers

Telemarketing

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 a public holiday.
• Weekdays - before 9 am or after 8 pm.
• Saturday - before 9 am or after 5 pm.

Calling on (not telephoning) consumers

A salesperson must not call on (which does not include telephone) a consumer to negotiate a deal:

• On Sunday or a public holiday.
• Weekdays - before 9am or after 6pm.
• 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 (not telephone)

Suppliers who contact a consumer, other than by telephone, must meet the following requirements.

Disclose purpose and show identification

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

• the Australian Consumer Law, or
• the relevant state or territory laws that applied prior to the Australian Consumer Law.

After this date, they must comply with the Australian Consumer Law.

Cease to negotiate

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 least 30 days about the particular product or service they were selling during the visit. However, a salesperson can visit the same consumer again about the sale of goods by a different supplier.

Contact details
An agreement signed by a salesperson on the supplier's behalf must state:

• the Australian Consumer Law, or
• the relevant state or territory laws that applied prior to the Australian Consumer Law.

After this date, they must comply with the Australian Consumer Law.

There are further requirements that apply to traders that call on consumers (as well as to telemarketers).





Requirements that apply to both telemarketing and other unsolicited marketing approaches

The agreement document

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.
• Within five 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).
• Be signed and dated by consumer on the front page.

The agreement document must clearly state:

• The consumer's cooling off rights (right of termination)
• The full terms of the agreement
• The total price payable, or how this will be calculated
• Any postal or delivery charges.
• The supplier's name, address, ABN, ACN, e-mail fax, etc

Cooling off

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 (cool-off). This notice must include the supplier's details including:

• Name and business address (not a post box number)
• Australian Business Number (ABN) or, if they have one, Australian Company Number (ACN)
• Fax number and email address, if they have these.

Waivers

It is an offence to induce, or attempt to induce, consumers to waive their rights.

Provisions that are void

It is unlawful to include or rely on provisions that exclude, limit, modify or restrict:

• A consumer's right to terminate the agreement
• The effect or operation of the ACL as it relates to unsolicited consumer agreements.

Cooling off and termination requirements

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 phone, 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 phone, the cooling off period begins on the first business day after the agreement was made.

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

Click here to download Cancellation notice – Unsolicited consumer agreement form



Extended cooling off period


Consumers may terminate an agreement up to 3 months after it is made (or the agreement documents are received, if the agreement is by phone) if the salesperson:

• 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; or
• Was in breach of any of the requirements for unsolicited consumer agreements (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.

Terminating an agreement

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.


If a consumer cools off or terminates

Once a consumer has given notice to terminate an agreement (either orally or in writing) the agreement is void. The notice is effective even if:

• Written notice has been given, but the supplier has not received it.
  
• Goods or services supplied have been wholly or partly consumed or used.
  

Related contracts

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

For example:
A consumer agrees to buy a $900 washing machine from a door-to-door trader, and also signs a separate agreement for servicing the washing machine, costing $80. The second contract is not covered by the cooling off provisions. If the consumer cools off on the washing machine purchase then the service contract is also cancelled.

For goods bought on credit or finance, it is the supplier's responsibility to contact the credit provider and arrange for cancellation. For more information, contact the Australian Securities and Investments Commission – www.asic.gov.au.




Supplier obligations

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:

• Written notice has been given, but the supplier has not received it.
  
• Goods or services supplied have been wholly or partly consumed or used.
  

What happens to the goods/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 where 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 the consumer's control.
• If the supplier does not collect the goods within 30 days, then the consumer can keep them.
• If the 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 responsibility for failing to comply

A supplier cannot enforce an agreement if the supplier's agent (salesperson) has breached the law on unsolicited consumer agreement.

Both the supplier and salesperson may be liable for the breaches.

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

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