Referral selling is when a consumer is persuaded to buy goods or services by promises of a rebate, commission or other benefit for supplying information that helps the trader sell to other consumers, and the consumer does not get the promised benefit unless some other event happens after the agreement is made.
Promising future commissions or rebates that depend on other events, such as subsequent sales is illegal in certain circumstances.
It is not ‘referral selling’ for a supplier to promise a benefit for simply providing the names of consumers or helping the trader supply goods.
The maximum civil and criminal penalties for referral selling are $10 million for a body corporate and $500,000 for an individual.
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