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The law classifies telemarketing and door-to-door sales as uninvited direct sales. These are when your salespeople approach customers uninvited, offering your goods or services. For these sales to be valid, you need to ensure you comply with the law. If you are a New Zealand Marketing Association member, you need to follow their telemarketing rules and Code of Practice. There is specific information you need to tell your customers at the time of sale and various standards you need to meet. If you do not, you could lose money through fines and cancelled sales. This article will go through five tips for your business if you use telemarketing and door-to-door sales so you can avoid these consequences.

1. Do Not Mislead Your Customers

When you engage with customers through telemarketing and door-to-door sales, you need to ensure you are clear and transparent. This is especially important as customers may see these sale tactics as intrusive and will be on high alert for any duplicity. Therefore, you need to be upfront and genuine when you sell your products or services in this way.

For your business’ telemarketers, they need to clearly state who they are and the general purpose of the call. They need to give the customer your business’ details, including your contact information. All offers need to be clear and defined so that the customer understands what they are promising to pay for.

For example, once you have identified who you are in your telemarketing call or text message, your sales pitch may use a price comparison or reduction to convince the customer to buy your goods instead of a competitor’s. This price comparison or reduction needs to be accurate and not misleading. Otherwise, you run the risk of breaching the Fair Trading Act.

2. Have the Appropriate Documentation

In both telemarketing and door-to-door sales, you need to ensure you give your customer the necessary legal documents for the sale. For a door-to-door sale, you would do this when you first engage the customer. For a telemarketing call, you need to send them a written copy of the sales agreement within five working days from the day after you make the agreement. The sales agreement needs to:

  • be in plain language;
  • clearly describe the goods or services you are selling;
  • tell the customer about their right to cancel; 
  • include the date the customer signed it; and
  • list your name, address, and other contact details, as well as the customer’s details.

If you do not provide the necessary documentation with this information, you cannot enforce the sales agreement.

3. Ensure Customers Know They Can Cancel

If you cold-call a customer or approach their property uninvited for a sale, these are uninvited direct sales. When you sell your goods or services through an uninvited direct sale, then your customers have a cooling-off period of five days to change their mind and cancel the sale without payment. You need to verbally inform the customer of this right and include it on the front page of the sales agreement. 

4. Ensure You Meet Your Consumer Guarantees

When you sell your goods or services in a telemarketing or door-to-door sale, you will likely be selling to consumers. This means that your goods or services need to meet their respective guarantees. If not, you need to provide a customer with a remedy, such as a refund, repair or replacement. The table below demonstrates the standards your goods or services need to meet:

Your goods need to be:

Your services need to be:

  • fit for purpose;
  • of acceptable quality;
  • delivered on time and in good condition;
  • the same as you describe;
  • the same as any demonstrations or samples you give;
  • sold legally; and
  • reasonably priced when you do not agree on a price beforehand.
  • completed with reasonable care and skill;
  • fit for the purpose the customer asked for;
  • carried out within a reasonable time frame when you set none; and
  • reasonably priced when you had not agreed on a price beforehand.

Customers can return goods if they do not meet the promises you make at the time of sale. Ensure you provide clear returns information at the time of sale or on your website.

5. Be Careful With Personal Information

When customers agree to purchase your goods or services through a telemarketing call or door-to-door sale, you will likely need their personal information to complete the sale and deliver goods. When you handle personal information, you need to comply with privacy laws. You need to tell them:

  • what personal information you are collecting;
  • the purpose of that collection;
  • who has access to their personal information;
  • whether they can choose not to give you their information;
  • the consequences of that choice;
  • whether any laws apply; 
  • that they can access their information and correct it; and
  • your contact details.

When you collect customers personal information, you need to do so securely. Do not collect financial information over the phone. Customers will be reluctant to provide you with their bank details over the phone and may think that you are scamming them.

Key Takeaways

If you sell your goods or services through telemarketing or door-to-door sales, you need to comply with the law. These are uninvited direct sales, so there are specific things that you need to tell your customers for the sale to be valid. If you would like more information or help with your telemarketing or door-to-door sales, contact LegalVision’s regulatory and compliance lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What are uninvited direct sales?

An uninvited direct sale is when you approach customers at their home or work, or over the phone uninvited, and offer them your goods or services.

Can customers cancel the contract after a door-to-door sale?

If you sell a customer goods or services through an uninvited direct sale, they have a legal right to a five day ‘cooling-off period’ to change their mind. During this time, they can cancel the contract.

What are consumer guarantees?

The Consumer Guarantees Act specifies particular guarantees for consumer goods and services. These mandate a particular standard of quality and service to protect consumer rights.

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