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Beware, some unscrupulous businesses can engage in illegal sales practices, also known as unfair business practices, when dealing with customers.

Examples of some of these are:

Referral Selling

Referral selling occurs when a consumer is persuaded to buy goods or services by promises of a rebate, commission or other benefit for supplying information that helps the trader sell to other consumers.  The consumer does not get the promised benefit unless some other event happens after the agreement is made.

Referral selling is an offence under the Australian Consumer Law 2010 (ACL).

Pyramid Schemes

Pyramid schemes are illegal.  They operate by requesting newcomers to make a payment often referred to as ‘the participant payment’ in order to join the scheme. In return, newcomers are promised payments for recruiting other ‘investors’ or new members. In this sense, the pyramid scheme makes a profit not by selling products or services but rather in the recruitment of new members.

Accepting payment with no intention to supply

A retailer must not accept payment for goods or services if:

  • there is no intention to supply;
  • there is an intention to supply different goods or services from those originally requested; and
  • it was known or ought to be known that goods or services could not be supplied in a timely and efficient manner.


If you need any help in identifying whether a business has engaged in an unfair business practice, seek advice from a business lawyer, as you may be entitled to compensation. If you would like to know your options, please call us on 1300 544 755 today!

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