Issue Date:  -  Thursday, 30 September 2004

Finance broker received knock - Cold calling protection for consumers

Recent practices within the finance broking industry to “cold call” clients have raised concerns for the Department of Consumer and Employment Protection. 

A recent court case has now confirmed that consumers are entitled to a “cooling off” period if they receive an unsolicited phone call from a finance broker and subsequent negotiations occur in their home. 

“Cold calling, the practice of phoning potential clients in the hope of attracting business, is regulated by the Door to Door Trading Act,” Consumer Protection Commissioner Patrick Walker said.

“The Act offers consumers protection for goods and services costing $50 or more. 

“Unsolicited phone calls and traders door knocking homes for business are covered by Act. 

“It requires traders to offer a 10-day cooling off period,” Commissioner Walker said.  “No payments can be requested or received during the 10 days.”

In the Court of Petty Sessions, Joka Group Pty Ltd, trading as Home Ownership Company (WA), its managing director John Whitley and an employee Paul Matthews were recently convicted of 17 breaches of the Door to Door Trading Act.

The clients of Home Ownership Company (WA) decided that the finance deal offered in a cold call was not in their best interest and cancelled the arrangements.  They contacted Consumer Protection when the company continued to pursue them for costs.

Home Ownership Company was fined $3,000 and Mr Whitley and Mr Matthews were fined $1,500 and $1,000, respectively.

The court said that ignorance of this piece of legislation is no excuse and that corporate entities should ensure that they seek professional advice in relation to their business activities to ensure that they do not offend the law.

“Consumer Protection will investigate complaints about traders who cold call consumers and fail to offer the protection provided by the law,” Commissioner Walker said.

“Charges for breaches of the Act have been made against two more finance brokers and a fourth is under investigation.”

Consumers with concerns about businesses cold calling are encouraged to contact Consumer Protection on 1300 30 40 54.