Buying goods or services from door-to-door salespeople or telemarketers can be an easy way to shop. But it can also be expensive if you are pressured into buying something that you don’t really need or can’t afford.

The direct commerce provisions of the Fair Trading Act 1987 apply to traders who sell goods and services in New South Wales by going door-to-door or making telephone calls. This law replaces the Door-to-Door Sales Act 1967.

What is direct commerce?

Under the law, traders who engage in direct commerce are known as dealers. A dealer may also be the supplier of the goods and services or may be negotiating direct commerce contracts on behalf of the supplier. They engage in direct commerce if they:

• go from place-to-place or make telephone calls, seeking consumers who may be prepared to enter into direct commerce contracts and
• enter into negotiations with the consumer with a view to making a direct commerce contract.

Direct commerce contracts

For the law to apply, a direct commerce contract must have all the following features:

• the supply to an individual of goods or services for personal, domestic or household use
• negotiations leading to the making of the contract take place between the dealer and consumer over the phone or in each other’s presence at a place other than the business or trade premises of the supplier
• the dealer has visited or called the consumer in the course of direct commerce
• the consumer did not invite the dealer to visit or call for the purpose of entering negotiations

• total cash or credit payable under the contract is not known at the time the contract is made or is known at that time and is more than $100.

Direct commerce provisions

5 day cooling-off period

There is a cooling-off period of 5 clear business days during which a consumer may cancel a direct commerce contract.

Consumers must be given written information about their cancellation rights before the contract is made. Telemarketers must give consumers the information over the phone and follow up with written information.

Consumers can cancel their contract by giving written notice to the dealer or supplier during the cooling-off period. They can give notice in person, by mail, fax or email and the following applies:

• door-to-door sales – within 5 clear business days from the day the contract was made
• telemarketing  – during the period beginning when the contract was made and ending 5 clear business days from the day written cancellation information was given to the consumer.

Fees for service

A dealer or supplier must not collect any fees during the cooling-off period for services provided by the dealer or supplier during that period.

Example: A roof repairer who calls uninvited and charges more than $100 for a job cannot collect payment if the repair work is carried out during the cooling-off period.

However, fees may be collected if the services are supplied on a continuing basis.

Restricted hours

A dealer must not visit a consumer for the purpose of negotiating a direct commerce contract between the hours of 8pm and 9am 7 days a week, unless the dealer has made a prior appointment.

Telemarketers must comply with the National Industry Standard which prohibits calls on a:

• weekday before 9am or after 8pm
• Saturday before 9am or after 5pm
• Sunday or nationally recognised public holiday.

Dealer to disclose identity

A dealer must advise a consumer of the purpose of the visit and produce a document setting out the dealer’s full name and supplier’s address, and if the dealer is not the supplier, the supplier’s full name.

Cessation of contact

A telemarketer must immediately cease negotiations when requested to do so. The telemarketer, supplier or any other person on behalf of the supplier must not contact the consumer again for at least 30 days.

A dealer must leave the premises when requested to do so by a consumer.

Cancelling a contract

A consumer must give written notice by post, fax, email or in person to the supplier during the cooling off period to cancel a direct commerce agreement. A consumer must return any goods to the supplier or notify them of where the goods can be collected. On receiving the goods or notice to collect the goods, the supplier must immediately refund the consumer any monies paid.

A consumer who doesn't take reasonable care of the goods before returning them may be liable to compensate the supplier for any damage. If the

supplier does not collect the goods within 28 days of receiving notice of the cancellation, the goods become the property of the consumer.

Exemptions

The law does not apply to the following direct commerce transactions:

• business contracts
• supply contracts for gas and electricity
• contracts arising out of a fundraising appeal
• contracts for the supply of a financial product or managed investment scheme within the meaning of the Corporations Act 2001
• contracts for the supply of goods or services that are the same kind as those supplied under an existing contract between the supplier and a consumer, for example, a dealer calls a wine club member with a new wine offer
• service maintenance contracts where the supplier makes a minor change to the terms of the contract, for example, a telecommunications company detects a fault in a landline phone service and telephones their customer to offer a fault rectification service
• consumer credit contracts if the contract is covered by the Uniform Consumer Credit Code, however, the trader must comply with the rules about restricted hours, ceasing contact and disclosing identity
• contracts for the supply of classified advertising – a dealer does not have to give notice of the consumer’s right to cancel these contracts in writing unless they are for the supply of a series of advertisements over a period of time.

Do not call register

The Commonwealth Government has established a Do Not Call Register that enables consumers to elect not to receive unsolicited telemarketing calls. For more information visit www.donotcall.gov.au