Your doorbell rings at home. You take a peek out your window. Then the realization hits you: it’s someone going door to door trying to sell you something again. If you’re anything like my cat (or me), you promptly hide in another room until the seller is gone –unless they are selling cookies, of course. For those of you who are brave enough to answer your door, or are at least curious about the legalities of door-to-door sales, you should keep reading.
In Alberta, the legal term for sales of goods or services door-to-door is a direct sales contract. A direct sales contract is a contract for goods or services (or both) totaling more than $25. You and the seller negotiate or sign the contract somewhere other than the seller’s usual place of business. Unlike a contract that you negotiate or sign in a marketplace, auction, trade fair, agricultural fair or exhibition, you will typically negotiate or sign a direct sales contract in your own home.
The Consumer Protection Act is the main law that applies to direct sales contracts. There are also regulations that set out more rules. For example, licensing processes for direct selling businesses and types of sellers that do not need a licence.
In Alberta, the legal term for sales of goods or services door-to-door is a direct sales contract.Direct sales contracts are legal but must meet certain legal requirements. For example, it must include specific information to be valid, and the Government of Alberta must licence the seller as a direct selling business. Not all businesses need a direct seller licence though. For example, insurance businesses, mortgage brokers and sales of perishable foods fit under this exception.
TIP: You can check if a seller has a direct seller licence by searching for the business on Service Alberta’s website. You can also call the Consumer Contact Centre at 1-877-427-4088.
Under the Consumer Protection Act, direct sales contracts must include standard contract information such as you and the seller’s full name and address, the date and place where the contract was signed, etc. Most notably, the contract must include a statement of cancellation rights and, if the purchase is financed, a disclosure statement.
A statement of cancellation rights sets out when and how you can cancel the contract. It must be on the front of the contract. Alternatively, there must be a notice on the front letting you know where in the contract the statement is.
On the other hand, a disclosure statement sets out the terms of the loan agreement between you and the lender. It includes information such as:
- Amount borrowed
- Loan duration
- Amount and frequency of payments
- Interest rate
- Any other fees charged
- What security the lender is taking. This could be in the form of a mortgage or registration against personal property such as your vehicles, boats, trailers, etc.
Direct sales contracts are legal but must meet certain legal requirements.Okay, so let’s say you decide to answer your door. Before you let the person into your home, you should ask to see their identification card. The ID must show their name plus the name, address and licence number of the direct selling business they are working for. You should also call or check with Service Alberta to confirm that the seller is licenced. If you find yourself in a situation where you might want to purchase something from the seller, here’s a couple of quick tips to protect yourself:
- Like with all other contracts, make sure you review the terms carefully before you sign anything.
- Do not rely on the sales representative to tell you what the contract says.
- Make sure that any terms you agreed to orally are also in writing on the contract.
- Do not let the sales representative pressure you into buying right away. You can always say no or take time to think about the potential purchase.
Lastly, what happens if you have buyer’s remorse after entering into a direct sales contract? Well, there’s a short window to cancel it. You can cancel it in writing within 10 days (including weekends and holidays) after you receive a copy of the written contract. There are some exceptions to this rule – for example, you have one year to cancel it if the seller did not have the required licence or the direct sales contract does not include all required information.
TIP: Is a door-to-door seller trying to sell you a furnace, air conditioner, water heater, windows or energy audit? As of January 1, 2017, the Government of Alberta has banned these types of door-to-door sales. But if you invite someone to your home to discuss buying these goods or services, then the transactions are still allowed.
To learn more about door-to-door sales, including cancellation rights, go to our publication: Door to Door Sales…What You Should Know.