A company selling share trading software and its sole Director have been fined a total of $7,500 and ordered to pay consumer compensation of $4,700 for breaking laws related to cold-calling contracts.

GTA Australia Pty Ltd (in administration), registered in NSW, was fined $5,000 and sole Director Kristopher Corbett, who resides on the Gold Coast, was fined $2,500 by the Perth Magistrates Court on 31 May 2017. Both were ordered to pay costs of $1,761 each.

Mr Corbett pleaded guilty to breaching provisions of the Australian Consumer Law (ACL) which required the company to honour a ten business day cooling off period for ‘unsolicited sales’. The law also required the company and its sales representatives to inform potential customers of their rights as well as provide information on how they could cancel the contract during the cooling off period.

In March 2015, a sales representative from the company cold-called a Mandurah consumer offering her a share trading software program for $9,400, but she wanted time to think about it. The next day, another sales representative from the company contacted the consumer and, during a two hour phone call, offered a discounted price of $4,700 but, if a profit of $30,000 was achieved within 12 months, a further $14,700 would be payable.

The consumer accepted the deal and paid a $500 deposit which the representative explained was refundable if she changed her mind. However, no information relating to her right to cancel the contract during the ten day cooling off period was supplied as required by the ACL.

Five days after agreeing to the purchase, the consumer paid the balance of $4,200 even though it was illegal for the company to accept payment prior to the end of the cooling off period. The consumer later changed her mind and wanted to cancel the contract within the cooling off period but the company refused to provide a refund.

Acting Commissioner for Consumer Protection David Hillyard said the right to a cooling off period protects consumers who may be forced into making hasty decisions.

“Cold-calling salespeople often catch consumers by surprise and, in these circumstances, consumers may succumb to high pressure sales tactics and agree to a purchase without time for proper consideration and research,” Mr Hillyard said.

“The cooling off period gives consumers who were approached uninvited and then agreed to a purchase the opportunity to review their decision and, if they end up regretting it, they can cancel without suffering a loss.

“Companies involved in unsolicited marketing campaigns must be aware of their obligations under consumer law and ensure their sales staff strictly adhere to the protocols that are put in place by the ACL.”

Under the ACL, companies which market their products or services by cold-calling or door to door trading must inform potential customers in writing of their right to a ten business day cooling off period and give them instructions on how they can cancel the contract if they change their mind. No money should change hands for sales over $100 and goods or services over the value of $500 should not be supplied during the cooling off period.

WA consumers who believe they were not given a cooling off period for an unsolicited sale are urged to contact Consumer Protection by email consumer@commerce.wa.gov.au or by calling 1300 30 40 54.

WA ScamNet has a warning with regard to share prediction and sports arbitrage software packages being offered to consumers.

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Media Contact (Consumer Protection)