Can I still cold call? The Impact of the Australian Consumer Law...

The Australian Consumer Law (ACL) is designed to be an Australian-wide consumer protection and fair trading scheme. From 1 January, 2011 it replaces provisions in 20 national, state and territory laws.

Agents need to be aware that the ACL changes the current Queensland laws and imposes additional requirements when you cold call for potential listings.

Restrictions on Unsolicited Contact

The ACL introduces a new national law dealing with unsolicited sales practices, including:
  • door-to-door selling
  • telephone sales
  • other forms of direct selling that do not occur in a retail context.
Salespeople who wish to make unsolicited contact with consumers in order to sell them goods or services must comply with:
  • restricted hours for contact with consumers (door-knocking, telemarketing)
  • disclosure requirements when making an agreement
  • criteria for the sales agreement, including that it must be in writing
  • restrictions on supply and requesting payment during the cooling-off period
When will the Disclosure Obligations and Cooling-Off Periods apply?

Agents have additional obligations under the ACL where there is an unsolicited consumer agreement. This term is defined in section 69 of the ACL. An agreement to appoint an agent to sell a property will be an unsolicited consumer agreement where:

  1. you approach or telephone a consumer (person selling property) without invitation from that person
  2. the agreement results from negotiations by telephone or at a location other than your business premises, and
  3. the total value of the goods or services is more than $100, or the value was not established when the agreement was made.
Example: An agent does a leaflet drop in a particular area and a property-owner rings the agent or agency to enquire about selling their property, which leads to an agreement. This is not an unsolicited consumer agreement, because the property-owner initiated the contact.

Cooling off and termination requirements

Sections 76 and 82 of the ACL create a 10 business day cooling off period.

Consumers who agree to unsolicited agreements have 10 business days to reconsider. During those 10 business days, consumers can cancel the agreement without penalty.

If an agent negotiates their appointment by telephone, then the cooling-off period begins on the first business day after the consumer receives the agreement document.

During the cooling-off period, an agent cannot

  • provide services or
  • receive payment for services
regardless of whether the agreement resulted from door-to-door trading or was negotiated by telephone.
 
Further rights to Terminate

Be careful to comply with the rules about unsolicited contact and informing consumers of their termination rights. If you do not, then the consumer has an extended time frame for terminating the contract.

The consumer can terminate up to 3 months after the agreement to appoint an agent if the agent:
  • visited outside permitted selling hours
  • did not disclose the purpose of the visit
  • did not produce identification, or
  • did not leave the premises upon request.
The consumer can terminate up to 6 months after the agreement to appoint an agent if the agent:
  • did not provide information about cooling-off rights
  • breached requirements for unsolicited consumer agreements (such as failing to provide a written copy or not including required information)
  • supplied goods or services during the 10 business days of the cooling-off period, or
  • accepted or requested payment during the cooling-off period.
How do I ensure my appointment to sell a property is valid?

If an agent approaches a seller in person, or telephones them to negotiate an unsolicited consumer agreement then:-

  1. the agent must inform the seller of their termination rights before the agreement is made;
  2. the seller must be given a written copy of the agreement that meets specific criteria;
  3. both parties must sign the agreement and any amendments.
The information about the sellers terminations rights must follow the form and content specified under section 79 of the ACL. Information must be:
  1. attached to the agreement
  2. expressed in plain language, legible and clear, and
  3. the most prominent text in the document, other than the text setting out the dealers or suppliers name or logo.
You must also give to the seller a notice that may be used by the seller to terminate the Agreement.

Penalties

If an agent does not comply with the new ACL provisions then:-
  1. the agent cannot enforce the unsolicited agreement; and
  2. there may be civil and criminal penalties imposed of up to $50,000 for a body corporate and $10,000 for an individual.
We have drafted a notice and proforma termination letter which we will give to you if required.

For further information please contact Roland Taylor in our Mackay office on (07) 4963 0807 or at rtaylor@swc.net.au.