‘Where’s My Money?’ Unsolicited Goods and Demands for Payment

It is a time honoured scam – send someone unsolicited goods and then demand payment, yet unsurprisingly it’s also against the law. Recipients of such goods or unsolicited services are protected by consumer law and any assertion of a right to payment can lead to pecuniary penalties.

Under section 40 of the Australian Customer Law (‘ACL’), a person involved in trade or commerce is prohibited from claiming a right to payment from the receiver of unsolicited goods or services, unless there is a reasonable cause to believe a right to payment exists.

Similarly, the ACL prevents the sending of an invoice for unsolicited goods or services unless it contains a regulation-compliant warning statement.

The good news for a recipient of unsolicited goods or services is that the law is clearly on their side. However, it would still be prudent to take further steps as outlined in the ACL. The recipient should give the sender of the unsolicited goods a written notice stating their:

  1. Name and address;
  2. Address for collection;
  3. A statement that the goods are unsolicited.

Having sent such a letter, the recipient can be safe in the knowledge that the sender of unsolicited goods loses the right to recover the goods one month after the notice was given. Alternatively, even if no notice is sent, the sender loses any recovery rights three months after the goods were received.

As Halsbury’s states, ‘thereupon they become the property of the recipient. The recipient is not liable to make any payment for the goods, and is not liable for their loss or damage during that period, except in the case of a wilful and unlawful act.’

It is therefore clear that the ACL provides protection for businesses and individuals who receive unsolicited goods or services. Although it may be prudent to send a return letter informing the sender of the address for collection, demands for payment are unlawful and the goods become property of the recipient three months later.

If you have received unsolicited goods or services and a corresponding demand for payment, do not hesitate to contact Mark Love, Director of Business and Corporate Law at Bradley Allen Love Lawyers or the Australian Competition and Consumer Commission.