What do I need to know when starting a direct marketing business?

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Table of Contents

• So what is an unsolicited consumer agreement anyway?
• Cooling off rights
• Face to face selling
• What is the law on telemarketing?
• Conclusion

Direct marketing by definition means you have unsolicited contact with customers.  This might involve ‘cold-calling’ customers on the telephone or enticing customers off the street.  Other methods might be by mailbox or with door-to-door sales. If you engage in unsolicited customer contact, you have legal obligations otherwise you could face significant fines or penalties of up to $50,000. These obligations include:

•  A limitation on hours when you can contact customers

•  Providing disclosure before making an agreement

•  Fulfilling certain criteria when making a sales agreement

•  Restrictions on trading in goods and services over a certain value

So what is an unsolicited consumer agreement anyway?

An unsolicited consumer agreement is required where a sale is secured by door-to-door, telephone or walk-by means – and the transaction is worth more than $100. So if you get a sale and its worth more than $100 you must:

• Tell the customer of their right to terminate

• Give the customer a written copy of the sales agreement

• Both parties must sign the agreement for it to be binding

The sales agreement must indicate:

• That the customer has termination and cooling-off rights

• The full terms of the transaction

• Total payable price, or at least how this amount is calculated

• Delivery or postal charges

• The supplier’s name, business address, ABN and email

The agreement must be made in clear, easy-to-understand terms. The front page of the document must also contain text which explains that it is an important notice to the customer, that they have an automatic termination right and an explanation that the sales agreement outlines and creates rights for the consumer. You cannot contract out of giving the customer termination rights and they cannot elect to waive these rights under any circumstances.

Cooling off rights

When a person agrees to transact with you after making an unsolicited sales pitch to them they are legally bound to have 10 business days to ‘cool-off’ and may rescind (i.e. cancel) the deal during this time without penalty.  This cooling-off period must be in the sales agreement and the 10 day period starts on the day they receive the agreement.

Face to face selling

Door-to-door sales people must immediately explain why they are visiting the person and show identification.  They must tell the potential customer that they may ask them to leave and immediately do so if they are asked to leave.  If the salesperson is asked to leave they must not contact the person on behalf of the same supplier within the next 30 days. It is unlawful to contact someone with this method of selling on a Sunday or a public holiday, or any time before 9am or after 6pm on a weekday.

What is the law on telemarketing?

Sales made by telemarketing must comply with all sales agreement requirements.  A telemarketer is not allowed to call before 9am or after 8pm on weekdays, after 5pm or before 9am on Saturdays and is not allowed to call on Sundays or public holidays.

Conclusion

Contact LegalVision on 1300 544 755 to get the best advice from a business law specialist. If your business is to avoid legal problems down the line, you’d be wise to get legal advice on how to conduct your direct marketing campaigns.