In June this year changes were made to the Fair Trading Act 1986
(as a result of the Door to Door Sales Act 1967 being repealed) to
include protections for consumers in the context of uninvited
direct sales such as door-to-door and (the more common) telemarket
What is an "uninvited direct sale"?
An "uninvited" direct sale is when:
- a business, or their agent, approaches a customer (someone who
is buying from a retailer) uninvited at their home, workplace, or
over the telephone, to try and sell goods or services
- an agreement is entered into for goods or services costing $100
or more (or a price that is uncertain at the time of supply).
The provisions contemplate this will include situations where
the agreement for the supply of goods or services is made as a
result of negotiations which take place as described above.
Therefore, even if a sale is not entered into at the time of the
contact, but takes place at a later date, it is likely to be caught
by these changes.
The Commerce Commission has stated that an uninvited
direct sale will include where:
- a customer provides their contact details to a business for
another purpose (such as a competition entry) and the business then
contacts them to sell goods or services.
- a customer responds to an unsuccessful attempt by a business to
contact them (such as by returning a missed call or responding to a
- a customer enters into negotiations with a business at the time
they receive an unsolicited quote or estimate.
Electronic message marketing, such as email or text, is not
covered by these provisions.
What do you need to know?
The new provisions set out the information which customers must
be provided with by a seller where an uninvited direct sale has
been made, as follows:
- The customer must be provided with a written agreement which
clearly includes details of the good or service, details of the
seller and a summary of the right of the customer to cancel the
- At the time of the sale the customer must be told (verbally or
in writing) of their right to cancel the sale (within 5 working
days of receiving a written agreement).
- Where the customer cancels the agreement the seller must
immediately repay all money already paid by the customer and the
customer must return the goods (at the cost of the seller).
- Where services are provided before the agreement was cancelled,
the supplier is not entitled to any compensation and if the
services have resulted in the alteration to the customer's
property, the seller is liable to return the property to the
condition it was in before the services were provided.
- A renewal of a product purchase or service will not be an
uninvited direct sale, provided that it meets certain
What are the penalties?
Businesses can be fined up to $30,000 and individuals up to
$10,000 for breach of these provisions. The Commerce Commission can
fine businesses who fail to comply with the uninvited direct sale
disclosure requirements up to $2,000, without a Court process.
The potential for a wide range of sales to be caught by these
provisions is significant and in the context of services having
been provided (where a seller is by the nature of the sale unable
to resell the service) potentially costly, particularly if a
customer's property needs to be reinstated.