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 – for example, other consumers also have to buy the goods or services from the same supplier.
It is not ‘referral selling’ if a supplier promises 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 $1.1 million for a body corporate and $220,000 for an individual.
Harassment and coercion
It is unlawful to use physical force, coercion or undue harassment in connection with the:
- supply or possible supply of goods or services
- payment for goods or services
- sale or grant, or the possible sale or grant, of an interest in land, or
- payment for an interest in land.
Undue harassment means unnecessary or excessive contact or communication with a person, to the point where that person feels intimidated, tired or demoralised.
Coercion involves force (actual or threatened) that restricts another person’s choice or freedom to act. Unlike harassment, there is no requirement for behaviour to be repetitive in order to amount to coercion.