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Unsolicited supplies explained
'Unsolicited supplies' occur when products or services are supplied to a consumer who has not requested to purchase or receive them.
It is not an offence for businesses to provide goods or services to consumers as a way of exposing consumers to the brand, product or service. Examples of this are free product samples sent in the mail, or door knocking households and offering to clean their windows as part of a free product demonstration. In these cases there is no expectation that the consumer will have to pay for the products or services.
However, it is an offence for businesses to demand payment for unsolicited products or services that the consumer did not request to purchase or receive. For example, the law prohibits a trader from demanding payment for products (such as books, magazines or DVDs) that have been posted to a consumer if that consumer never requested the products be sent.
Businesses must not issue an invoice or other document for unsolicited products or services supplied unless the invoice or document contains:
- the amount of the payment
- the warning statement - “This is not a bill. You are not required to pay any money”. This warning statement must be the most prominent text on the document.
In the event of a dispute, the business operator needs to prove they have a reasonable cause to believe they have a right to the payment.
If businesses provide unsolicited products or services
The recipient is not required to pay for the products or services and is not liable for loss of or damage to the products, or loss or damage as a result of the service supplied. However, the recipient may be liable to pay compensation if they wilfully damage the products during the recovery period.
The business is entitled to recover the products within three months of them being received (called the “recovery period”). However, if the recipient advises the business in writing that they do not want the products, then the recovery period is reduced to one month starting a day after the day the notice was given.
The recipient cannot unreasonably refuse to allow the supplier to collect the products during the recovery period.
If the unsolicited products have not been collected within the recovery period the recipient can keep them without any obligation to pay.
However, the recipient is not entitled to keep the products if they were not intended for them (such as if the packaging was clearly addressed to another person).
If a business is billed for an advertisement they did not authorise
Businesses sometimes receive bills for the publication of entries or advertisements (about the business) that they have not authorised.
The law prohibits requesting payment for unauthorised entries or advertisements in publications, unless the person making the request has reasonable cause to believe that the entry or advertisement was authorised.
If a person or business is invoiced for an unauthorised publication, that invoice must include the required warning statement - "This is not a bill. You are not required to pay any money". This warning statement must be the most prominent text on the invoice.
The business must give written (and signed) authority before payment can be requested for the entry or advertisement.
The authorisation document must specify the:
- details of the entry/advertisement
- name and address of the publisher
- charges that will apply.
In the event of a dispute, the person demanding payment would need to prove that the placing of the entry or advertisement had been authorised.
A business must not send unsolicited credit or debit cards
It is an offence to send unsolicited debit cards or credit cards (including store-branded credit cards and store account cards) to a person unless:
- the person has requested the card in writing, or
- the card is a replacement, renewal or substitution for a previous card and used for the same purpose.
An item is considered to be a credit card if it is intended to be used to obtain cash, products or services on credit.
An item is considered to be a debit card if it is intended to be used to access an account held by the person for the purpose of withdrawing or depositing cash or obtaining products or services.
For more information about unsolicited credit and debit cards, download RG 201 Unsolicited credit cards and debit cards (PDF, 81 KB) on the Australian Securities and Investments Commission website.
Penalties for sending unsolicited credit or debit cards
The maximum civil pecuniary and criminal penalties for a body corporate are the greater of:
- $10 million, or
- three times the value of the benefit obtained from the offence, or act or omission, by the body corporate and any related bodies corporate if the benefit obtained can be determined by the court, or
- if the court cannot determine the value of the benefit, 10 per cent of the annual turnover of the body corporate.
The maximum penalty for a person is $500,000.