When sellers approach you uninvited
Door-to-door sales and other uninvited direct sales
The Fair Trading Act gives you special protections if you buy goods or services in an uninvited direct sale and the price is more than $100 or isn’t yet known. An uninvited direct sale is where a seller has come uninvited to your home or workplace, or has phoned you uninvited. In these cases, you’ll have the right to cancel the agreement and, if you’ve already paid some or all of the price, to get your money back.
Note: Unlike under the old Door to Door Sales Act 1967 (now repealed), the right to cancel an uninvited direct sale under the new laws in the Fair Trading Act applies not just when you buy the goods or services on credit, but also when you pay for them in full at the time of the sale.
What is an “uninvited direct sale”?
The special protections for uninvited direct sales cover you when:
- you buy goods or services after the seller has come uninvited to your home or workplace, or has phoned you uninvited, and
- the price that you’ve paid or will pay under the agreement is more than $100, or the price isn’t known at the time that you receive the goods or services.
It will still be an “uninvited” direct sale even if:
- you had given your name or contact details to the seller for some other reason, and later they came to your home or workplace or phoned you to try to sell you goods or services
- the sale happens when you ring them back after they tried unsuccessfully to contact you (for example, if they had left a voice message)
- you had earlier bought something from the seller after inviting them to phone you or to come to your home or workplace that previous time.
Requirements for the content and form of an uninvited direct sale agreement
The seller must make sure that the agreement is in writing, and that it’s clear, able to be read, and in plain language. You must be given a copy of the agreement at the time of the sale or, if the sale was made over the phone, within the next five working days.
The agreement must state the total price you’ll have to pay and any other payments you’ll have to make, such as interest. If the total price or the amount of the other payments isn’t known at the time of the sale, the agreement must say how this will be worked out. The agreement must also be dated.
The following information must also be on the front page of the agreement:
- a clear description of what you’re buying
- a summary of your right to cancel the agreement (see below, “Your right to cancel an uninvited direct sale”)
- the seller’s name, street address, phone number and email address
- your name and street address.
Before the agreement is entered into, the seller must also tell you verbally about your right to cancel the agreement, and about how you go about cancelling.
If a seller breaches these requirements, the Commerce Commission can issue them with an infringement notice requiring them to pay an infringement fee (a fine), as an alternative to bringing criminal charges.
Your right to cancel an uninvited direct sale
You have the right to cancel an uninvited direct sale agreement. You do this by giving notice to the seller within five working days after the day on which you were given a copy of the agreement.
If the seller didn’t comply with the requirements for the content and form of the agreement (see above), you can cancel at any time, not just within the first five working days (but if their failure to comply was only minor, the five-working-day limit still applies – for example, if they were late in giving you a copy of the agreement but this didn’t disadvantage you).
To cancel, you don’t have to follow a particular process or use a particular form or set of words. You can do it in any way (whether in writing or by speaking to the seller) that shows you intend to cancel or withdraw from the agreement.
When you cancel, you must contact the seller using the contact details given on the agreement, or in any other way agreed between you.
The effect of cancelling an uninvited direct sale
Fair Trading Act 1986, ss 36O-36R
If you cancel an uninvited direct sale agreement within the five working day time limit, the seller must immediately repay you all the money you’ve paid, and the agreement is treated as if it had never been made.
Once you’ve been repaid the money, you must let the seller take any goods that you bought under the agreement, from your address as stated in the agreement, and at any reasonable time that the seller requests. You must continue to take reasonable care of the goods for 10 working days after you give notice that you want to cancel. If the goods are lost, destroyed or damaged while in your possession before the 10 working days are up, you’ll have to pay the seller compensation (but not if this resulted from normal use or from circumstances outside your control).
If you don’t let the seller pick up the goods during the 10 working day period, and this failure on your part is unreasonable, then your obligation to take reasonable care of the goods continues until you give the seller a reasonable opportunity to pick the goods up.
If the agreement was for services (lawn mowing, for example), and you cancel after the other person has already provided these services, they’re not entitled to be paid. If your property has been changed or damaged, you can require the supplier to return it to the condition it was in before, at their expense.
When uninvited companies come to your door
An “uninvited direct sale” is when a sales person comes uninvited to your house, workplace or over the phone to offer you goods or services. For example, if a sales person comes to your door and tries to convince you to sign up to a new power or internet provider, this is classed as an “uninvited direct sale” if the contract is for $100 or more.
If you’ve committed to anything you have 5 days to cancel it. You must be given a written copy of the sales agreement at the time of the sale in person, or within 5 working days if the sale was made over the phone. The sale agreement should clearly say what the sale is for, how much it will cost in total, state your right to cancel, their contact details and the date signed.
If you don’t get this information, this is a breach of the Fair Trading Act and you can cancel the contract. The same applies to people selling things like vacuum cleaners or educational software.
Tip – “Do Not Knock” stickers issued by Consumer NZ help to deter uninvited sales people.
When can a seller enforce an uninvited direct sale against a consumer?
If you buy through an uninvited direct sale, and you don’t cancel within five days, the seller can enforce the sale against you and claim any unpaid amounts. They must provide you with the sales agreement with the correct information.
