Door-knock, telemarketing sales laws change

By Ben Chapman-Smith

New Zealand's 40-year old laws around door-to-door sales are set to change. Photo / Bay of Plenty Times
New Zealand's 40-year old laws around door-to-door sales are set to change. Photo / Bay of Plenty Times

New Zealand's outdated direct selling laws are set to change later this year in an attempt to capture more modern sales techniques such telemarketing.

The Door to Door Sales Act (DDSA) was passed in 1967 as a way of protecting consumers from making poor decisions when confronted by direct sellers.

But 40 years on, there is confusion about whether the law covers telemarketing or electronic payments.

The Consumer Law Reform Bill, expected to pass through parliament in September, aims to repeal the DDSA and create new rules within an enhanced Fair Trading Act.

When submissions were made to the Ministry of Consumer Affairs' discussion paper 'Consumer Law Reform' in June 2010, more than one third commented on direct selling and most of those called for tougher regulation.

The Commerce Commission said it received a "disproportionate number of complaints" about door to door selling and telemarketing compared to complaints about sales in stores or online.

As a result, new rules will cover goods or services purchased not just face to face but also by phone, where the trader approached the consumer uninvited at home or any place not the trader's business address.

New direct selling regulations will also apply to cash and credit card payments, as the existing law only applies to credit agreements.

The Consumer Law Reform Bill also suggests increasing the amount of money that can be spent in a transaction - either at the front door or over the phone - from $40 to $100.

There was opposition to this from the Citizens Advice Bureau, who said that the dollar limit be $50.

"Sales of $50 to $100 dollars can still be a significant purchase for a low income family (especially if regular sales are occurring)," it said.

"We consider that setting the limit to $50 would help prevent situations where some sellers may deliberately target sales just below the threshold."

The so-called 'cooling-off period' - the time consumers have to cancel or change an agreement made with a seller - is also being changed under the Consumer Law Reform Bill.

Some consumer organisations called for a 10 day cooling-off period, but the Bill is suggests cutting this from seven to five working days.

Regulation of hours that direct sellers can call is also being suggested.

The Ministry of Consumer Affairs' says submissions on this idea were "split by consumer and business interests".

The Australian Consumer Law restricts the allowable hours for door-to-door selling to between 9am and 6pm Monday to Friday and 9am to 5pm Saturday, with a prohibition on Sunday and public holiday visits.

But New Zealand does not look set to change in this way.

"While telemarketing calls in the evenings, especially, are considered to be a nuisance, there does not appear to be strong evidence of significant issues relating to calling hours, to warrant the regulation of calling hours," the Ministry said.

It goes on to say that "any attempts by businesses to call during inopportune hours will only harm their own prospects".

Another issue looked at was a "Do Not Call Register".

The New Zealand Marketing Association operates a voluntary Do Not Call Register, which offers consumers the chance to opt out from direct marketing on a generic basis, rather than an agency by agency basis.

The Ministry said more investigation is needed as to whether it is made compulsory for all direct marketers and sellers to observe such a register.

The Citizens Advice Bureau had strong views on the voluntary nature of the register.

"We do not think that consumer choice should be restricted to only being able to choose whether or not to answer the phone or to hang up - this is not a meaningful or sufficient choice," its submission said.

It wants to see a "do not visit" register made a legal requirement for salespeople to follow.

Minister of Consumer Affairs Simon Bridges is expected to push the Consumer Law Reform Bill into law later this year, and the bill currently has strong cross-party support.

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