What Constitutes Fair Sales Practices? Navigating Australian Consumer Law for Business
Updated: May 12
In the quest for business expansion, it's crucial to strike a balance between assertive marketing and adhering to the Australian Consumer Law. Overstepping the line can lead to legal complications, while excessive caution might result in missed opportunities and losing out to competitors.
In this article, Arida Lawyers provide a succinct overview of sales practices that are deemed unlawful under Australian Consumer Law.
Potential penalties of up to $1.1 million for corporations or $220,000 for individuals can be imposed for the following breaches:
Demanding payment for unsolicited goods or services that the consumer didn't explicitly agree to purchase or receive.
Engaging in Pyramid Schemes, characterised by recruiting additional salespersons, where the income generation is tied more to recruitment than to the sale of a legitimate product.
Displaying inconsistent pricing. If prices vary in different display settings, businesses may be required to remove the goods until prices are corrected, or sell at the lower advertised price. This point also pertains to advertising partial or incomplete costs that don't accurately reflect the total price.
Harassing or coercing clients when selling or attempting to recover payment.
Breaches that can potentially attract penalties ranging from $6,000 to $50,000 include:
Salespersons making unsolicited contact with consumers with the intention of making sales. However, unsolicited sales activities are permitted under specific circumstances. Conditions apply to the permissible hours for contact, required disclosure of information, the nature of the agreement, the value of the services, and the cooling-off period. Restrictions are even tighter for financial products under Australian Consumer Law. Consequently, businesses engaged in telemarketing and door-knocking need to be particularly cautious.
Unlawful lay-by agreements. Businesses are obliged to provide written lay-by agreements and terms and conditions to consumers. They can only cancel a lay-by agreement under certain conditions, and can only impose a fee if the client cancels under specific circumstances.
Failing to provide proof of transactions in the appropriate format.
To operate confidently, all business owners and operators should be well-versed in the sales practices considered lawful and unlawful under Australian Consumer Law. In addition, legal counsel should be sought whenever there's uncertainty about the legitimacy of sales practices or when facing allegations from a consumer.
Based in Parramatta, Arida Lawyers offers comprehensive legal services spanning contract law, building and construction law, consumer law, debt recovery and commercial law. If you need assistance in ensuring your sales practices comply with the prescribed legislation and regulations, or if your business is facing accusations of unlawful sales practices, please contact us at info@aridalawyers.com or call 1300 146 390.
This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.
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