MCCA Direct Marketing Model Code of Practice

Part 1: Introduction

Background and objectives

1. By using direct marketing techniques, distance selling has the potential to increase consumers’ choice of, and access to, a wide range of goods and services. However, features that distinguish distance selling from traditional retailing suggest that specific rules for distance selling may be appropriate.

This code is intended to enhance the potential for consumers to benefit from distance selling, and to improve the market for reputable businesses. It is also intended to prevent unreasonably intrusive forms of marketing by a variety of users of direct marketing techniques including distance sellers and fundraisers. It seeks to do this by:

1. ensuring that consumers have access to the product and service information they need to make informed choices;
2. promoting ethical sales practices and ensuring that fair trading principles are complied with;
3. ensuring that consumers have access to appropriate returns policies, complaints procedures and remedies where there is a problem with a sale; and
4. protecting consumers from unreasonably intrusive direct marketing practices.

Status of code

2. This code is a model code. Industry associations whose members are involved in direct marketing are encouraged to establish their own codes based upon the provisions contained in this code. Individual companies are likewise encouraged to adopt the standards set out in the code.

Application

3. This code is designed to apply to direct marketers including distance sellers, charities and fundraising organisations, that use direct marketing techniques.

Exemptions

4. The following sales practices, goods and services are exempt from the code:

1. automatic vending machines; and
2. automated commercial premises.

5. Contracts for the supply of perishable goods are exempt from the right of cancellation or ‘cooling off period’ provisions of the code (clauses 32–38).

6. Part 2 of this code is designed to apply to distance sellers rather than charities and fundraisers. However, charities and fundraisers are encouraged to adopt those provisions in Part 2 which are of relevance to their operations.

7. Part 2 of this code is not intended to apply in circumstances where a contract is initiated from a contract solicitation made using a means of communication at a distance but is finalised in the presence of both parties to the contract.¹

Conflicting legislation

8. Where there is any conflict between a provision of this code and Australian Government, State or Territory legislation, the legislation shall prevail.²

Adopting the code

9. Any party involved in direct marketing is encouraged to adopt this code. Parties adopting the code are requested to notify the secretariat of the Ministerial Council of Consumer Affairs of that fact and provide to the secretariat a copy of their code.³

Citation

10. This code may be cited as the Direct Marketing Model Code of Practice.

Interpretation

11. References to singular include references to plural and vice versa.

12. For the purposes of this code:

Calling line identity means data generated by a telecommunications network which identifies the originating telephone number.

Campaign means a course of action organised by a direct marketer and designed to induce the purchase of particular goods or services or the making of a donation.

Charity means any organisation undertaking or commissioning fundraising activities for a charitable purpose.

Consumer, unless otherwise indicated, means:⁴

• a person acquiring goods or services:

1. where the price of those goods or services does not exceed $40 000; or
2. where, if the price of the goods or services does exceed $40 000, those goods or services are of a kind ordinarily acquired for personal, domestic or household use or consumption or, in the case of goods, the goods consisted of a commercial road vehicle;

and, in the case of goods, the person did not acquire the goods, or hold themselves out as acquiring the goods, for the purpose of resupply, or for the purpose of using them up or transforming them in trade or commerce, in the course of a process of production or manufacture or of repairing or treating other goods or fixtures on land.

Consumer also includes a prospective consumer.

Continuing series of goods or services includes:

• periodic distribution of distinct goods or services to a consumer; and
• periodic distribution of goods or services to a consumer where the goods or services are not complete until the final instalment is distributed.

Contract solicitation means any form of communication, whether public or personalised, including all the elements necessary to enable the recipient to enter directly, or to offer to enter directly, into a contract that is intended to be negotiated and concluded through a means of communication at a distance.

Direct marketer means any individual or organisation who engages in direct marketing, and includes a telemarketer and third party marketers.

Direct marketing means the marketing of goods or services or the seeking of donations through a means of communication at a distance where:

1. consumers are invited to respond using a means of communication at a distance; and
2. it is intended that the goods or services be supplied under a contract negotiated through a means of communication at a distance.

Distance seller means an individual or organisation contracting or intending to contract for the sale of goods or services to a consumer where the consumer is contacted through direct marketing. A distance seller may engage in direct marketing itself or employ a direct marketer to do so.

Fundraising means soliciting donations from the public using direct marketing techniques.

Means of communication at a distance means any method permitting the exchange of information between a consumer and a distance seller not in the presence of one another. Such means include, but are not confined to:

• unaddressed printed matter;
• addressed printed matter;
• letters;
• advertising in the print media;
• radio advertising;
• television advertising;
• catalogues;
• telephone with human intervention;
• telephone without human intervention;
• videophone (telephone with screen);
• videotext (microcomputer and television screen, with keyboard, remote control or touch screen);
• electronic mail;
• short message service;
• the Internet;
• facsimile machine; and
• video/audio cassettes.

Outbound telemarketing call means a telephone call initiated by a telemarketer or by an automatic dialler mechanism that is designed to induce the purchase of goods or services or the making of a donation to a charity or fundraising cause.

Personal information means information or an opinion (including information or an opinion forming part of a database), whether true or not, and whether recorded in a material form or not, about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion.

Restricted goods or services means goods or services that are, by Australian Government, State or Territory legislation, prohibited from being sold to a particular class of person.

Statutory warranties includes statutory warranties and statutory conditions.

Telemarketer means any individual or organisation who engages in telemarketing.

Telemarketing means all activities that relate directly or indirectly to direct marketing and which involve the use of a telephone, facsimile machine, or other customer equipment connected to a telecommunications network to contact a consumer.

Third party marketer means any organisation or individual who carries out part or all of the direct marketing process on behalf of the direct marketer.

¹ This clause ensures that contracts negotiated partly at a distance and partly in person (for example, some companies use telemarketers to make the initial contact, with the contract being finalised in person) are excluded from Part 2 of the code only. The relevant clauses in other parts of the code apply to the parts of the transaction conducted at a distance. However, in general, the application of the fair trading principles to such transactions would place businesses using a part distance/part traditional approach at a competitive disadvantage to other retailers.

² Note that this code may, at times, conflict with the door to door trading legislation in the States and Territories. Where that is the case, the legislation will apply.

³ The secretariat of the Ministerial Council on Consumer Affairs (MCCA) is located at:

MCCA Secretariat
Competition and Consumer Policy Division
Department of the Treasury
Langton Cresent
PARKES ACT 2600

Telephone: (02) 6263 3051
Facsimile: (02) 6263 2960

⁴ This definition reproduces the definition in the Trade Practices Act 1974, s. 4B.

Next: Part 2: Fair Trading Requirements
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