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Buying from a direct seller: your rights

Direct sellers must be licensed and follow the rules set out in the Direct Sellers’ Regulation Act and Direct Sellers Regulations. The legislation outlines your rights when you buy from a direct seller.

By law, direct sellers must provide contracts for sales over $100. You have the right to a 10-day cooling-off period where you can cancel the sale for any reason. If you buy from a licensed direct seller that goes out of business before delivering your goods or services, you can get a refund.

Direct sellers are people who initiate the sale of goods or services at a location away from a usual place of business. They include door-to-door salespeople, telemarketers and people who sell items at home-based parties.

Identification

Every salesperson selling for a direct selling company needs to carry identification proving that they are associated with a licensed direct selling company. Every salesperson is required by law to use their name as it appears on their identification in all communications (written and verbal). You should always ask for this information up front, whether in person or if they call you on the phone.

Statements of cancellation and contracts

If you agree to buy goods or services from a direct seller, they need to give you a Statement of Cancellation for purchases totaling less than $100. For purchases totaling more than $100, they need to give you a contract. The Statement of Cancellation needs to correspond to either a one-time sales contract or a continuing services contract.

One-time sales contract

A one-time sales contract is generally used when you take delivery of the goods at the time of purchase or at a specified date. This could include situations like a houseware party where you buy a bowl and it is delivered 1 week later.

The one-time sales contract needs to include:

  • name of the direct selling company
  • company's address and phone number
  • your name, address, phone number and signature
  • description of the goods or services you've purchased
  • number of items purchased
  • price of each item and total cost
  • date of delivery
  • date and place of contract
  • salesperson’s name and signature
  • Statement of Cancellation rights

The salesperson needs to date and sign the contract. Be sure to save your copy of the contract in case you decide to cancel the sale.

Cancelling a one-time sales contract

You have the right to a 10-day cooling-off period where you can cancel the sale for any reason. The 10-day period starts when you receive the contract or Statement of Cancellation. You don’t have to give the seller a reason for cancelling your purchase.

You can cancel the sale up to a year after receiving the contract if the seller fails to meet the terms of the contract. This includes:

  • if the goods or services do not match the description in the contract
  • if the goods or services are not delivered within 30 days of the promised delivery date

To cancel the sale, you need to submit a notice of cancellation to the address specified on the Statement of Cancellation or contract. You should submit the notice by registered mail, in person or by fax so you have proof you sent the document. You need to return the goods to the seller who then has 15 days to refund your money (and any trade-in or the cash value of the trade-in).

Continuing services contract

A continuing services contract is used for an ongoing service or goods for a specific period of time (maximum 3 years). This could include situations like an alarm company where you buy an alarm system and 3 years monitoring for a monthly fee.

The continuing services contract needs to include:

  • name of the direct selling company
  • company's address and phone number
  • your name, address, phone number and signature
  • description of the goods or services you've purchased
  • number of items purchased
  • itemized fair market value of the goods and services to be provided over the term of the contract
  • total cost to you, including any fees, charges, penalties, interest and other amounts as calculated monthly
  • terms of payment and the total cost of the contract over the term of the contract (not more than 3 years)
  • statement that seller will provide you with written notice between 30 and 60 days before the expiry date of the contract
  • statement that the contract will be automatically extended in the circumstances described in subsection 20A(3) of the regulations
  • date of delivery
  • date and place of contract
  • salesperson’s name and signature
  • statement of cancellation rights

The salesperson needs to date and sign the contract. Be sure to save your copy of the contract in case you decide to cancel the sale.

Cancelling a continuing services contract

You may cancel a continuing service contract at any time. You don’t need to give the seller a reason to cancel. You should give notice of cancellation by a method like registered mail or personal delivery that provides proof of the delivery. After the seller receives the notice of cancellation, they have 15 days to refund any money that they owe you.

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