Dealing with Direct Sellers

NOTE: This article is part of a feature series titled Consumer Savvy and is produced by Service Nova Scotia and Municipal Relations. Today's feature is the seventh in a series on consumer issues and deals with direct sellers. The Consumer Savvy logo is available for use by print media; call Robyn McIsaac at 902-424-2933.

As consumers, we have access to thousands of products and services in our marketplace each day and a number of different ways to purchase them. We find them in our local department or grocery store, order them from a catalogue, purchase them online via the Internet, or buy them from a direct seller.

According to the Direct Sellers Association of Canada, Canadians spent $1.6 billion on goods and services from 1.3 million independent or direct sales contractors in 1999. Nova Scotians purchased roughly $50 million in goods and services from direct sellers. They are the telemarketers who call you with a special offer on carpet cleaning; the salespeople who sell items at home-based parties; or the salespeople who knock on your door with a revolutionary new product that can't be bought in stores.

Many of these sales are completed successfully and satisfactorily, but there are occasions where you might find yourself wondering what to do if the product, or service, you've purchased is not what you were promised, is defective, or has not been received. Perhaps the seller has not met the terms of the contract you signed. Perhaps you've changed your mind and want to cancel the sale. What then?

When buying goods or services from a direct seller, you have certain rights as a consumer. And, with caution, you can help make sure you receive the product you were promised, or get your money back if the terms of the contract are not met.

Who are Direct Sellers?

When we think about direct sellers, most of us think about door-to-door salespeople. But direct sellers are any sellers -- door-to-door or otherwise -- who initiate the sale of any goods or services at a location away from a usual place of business. The regulations that apply to direct sellers in Nova Scotia also apply to the sale of hearing aids.

How do I know the seller is a legitimate, reputable salesperson?

Every direct seller is required to be licensed by the province, or carry identification proving that he or she is associated with a licensed company. In fact, every direct seller is required by law to use their licensed name and number in all communications -- written and verbal -- with you. You should always ask for this information up front, whether you are invited to a candle party or called on the telephone.

What happens when I agree to purchase goods or services?

Once you have agreed to purchase goods or services, the direct seller should present you with a statement of cancellation and, for sales totalling more than $100, a contract. The contract should include: -- the name of the seller's company -- the company's address -- the company's phone number

The contract should also give a description of the goods, or services, you've purchased, the number of items purchased, the price of each item, and the total cost, along with the date of delivery. The contract should be dated and signed by the seller and include his or her name. Be sure to save your copy of the contract in case you decide to cancel the sale.

How do I cancel a sale?

Having second thoughts about your purchase? That's okay, many of us do. But if you are serious about cancelling the sale, you have a 10-day period from the day you receive the contract or cancellation statement to do so. This is called the "cooling-off" period and you do not have to give the seller a reason for cancelling your purchase.

If the seller should fail to meet the terms of the contract -- for example, if the goods or services do not match the description in the contract or are not delivered within 30 days of the promised delivery date -- you may cancel the sale up to a year from receiving the contract, or cancellation statement. To cancel the sale, you must submit a notice of cancellation to the address specified on the cancellation statement or the contract. You should submit the notice by fax, registered mail, or personal delivery so that you have proof the document was sent. You must return the goods to the seller who then has 15 days in which to refund your money or offer the value of a trade-in.

What if the company goes out of business?

Companies go out of business every day. Sometimes, they go out of business before delivering the goods or services you've purchased, leaving you wondering if you will ever see your money again. That might make you particularly nervous about dealing with direct sellers, but it shouldn't. All direct sellers are required to provide a bond to the province based on the value of the goods or services they sell. So if a company goes out of business before you receive your goods, you have a good chance of receiving your money if you cancel the sale or contract.

If you would like further information on your rights when dealing with direct sellers, please contact Service Nova Scotia through our Access Centres, by calling 902-424-5200 or toll-free in Nova Scotia at 1-800-670-4357.

We're here to help.