You may have gotten that knock. You open the door and then realize it wasn’t your favourite aunt or a friend returning your power tools, but instead it’s a door-to-door salesperson. The door-to-door canvassing technique is a method of sales and advertisement that involves a representative going from one dwelling to the next to pitch their product or service in person.
Often unsolicited, this model has been subject to bans and regulations in Ontario with regard to most heating, air, and water services. Although they do not stop telecommunications companies, home maintenance services, or charities from engaging in door-to-door canvassing, the rules have been designed to deal with the majority of the complaints, incidents, and inquiries dealt with by Consumer Protection Ontario.
In an effort to control sometimes uninvited, coercive, and misleading sales pitches, and to ensure that vulnerable consumers are not taken advantage of, Ontario legislation has been enacted and expanded to prohibit “direct agreements” entered between door-to-door salespersons and consumers.[1] Almost all goods and services agreements signed at a consumer’s home and concluded in person require a direct agreement, which must include a 10-day cooling off period when consumers can cancel without giving any reasons and a one-year period if the seller used an unfair practice, the contract lacks information about the product/service, or no contract is received.
The protective legal measures around some direct agreements automatically render door-to-door contracts void, may entitle consumers to a refund of any amounts already paid within one year after the payment is made or allow buyers to keep the goods or services they were sold without any obligation, and could require businesses to reimburse consumers for any third party penalties or fees required to remove a product or reverse a service.[2]
The provisions in the Ontario Consumer Protection Act under section 43.1, which came into effect on March 1, 2018 as the “restriction on entering into certain direct agreements,” disallow suppliers from soliciting or entering into direct agreements with consumers for the supply of the listed goods or services below and make unsolicited direct agreements for the following products unenforceable:
- Furnaces
- Air Conditioners
- Air Cleaners
- Air Purifiers
- Water Heaters
- Water Treatment Devices
- Water Purifiers
- Water Filters
- Water Softeners
- Duct Cleaning Services[3]
This prohibition voids any contravening direct agreement, including service, sales, and consumer agreements and leases, related agreements including credit agreements, or new contracts entered by visiting-suppliers without the prior approval of the consumer for solicitation.[4] Violating this law risks a fine of $50,000 or imprisonment for up to two years for individuals, or a fine of $250,000 for corporations.[5]
The exceptions to the general rule are that suppliers may freely share promotional and marketing materials at the home of any consumer,[6] and consumer-initiated contracts that require the visit of a supplier for the purpose of entering into a contract are binding. If a consumer initiates a contract with a supplier and requests for the supplier to come to the residence of the consumer, then the supplier is permitted to enter agreements for the prescribed goods and services at the home of the consumer.
Initiating communications with suppliers in an effort to enter a direct agreement at the consumer’s home, requesting suppliers to attend at the consumer’s home to enter a direct agreement, or agreeing that a supplier which is already present at the consumer’s home may solicit the consumer to enter a direct agreement all disqualify consumers from relying on the protection of the Consumer Protection Act. To qualify for this exception, suppliers must maintain a record of the contract for three years following the date of agreement, and should add a mandatory cover page informing consumers of their rights in each contract and ensure marketing materials do not contain misleading information.[7]
The legislative prohibition of direct agreements broadened narrow prescriptive rules related only to water heater agreements,[8] but the current list of prescriptive rules should be expanded. The current legal framework fails to encompass companies in other sectors that do not fall under provincial jurisdiction, and limits its positive impact by focusing only on certain household products and services. The breadth of this ban should be widened to target predatory and unscrupulous door-to-door sales tactics, help avoid deceptive business practices, and protect especially vulnerable Ontarians such as seniors or individuals that lack capacity (such as mental infirmity or disability).[9]
Until further products or services are prescribed in the Consumer Protection Act, and while certain limitations exist, consumers should be cautious when dealing with door-to-door salespeople. According to Consumer Protection Ontario, consumers that are approached by door-to-door salespeople or suppliers that are attending the premises of consumers should be aware of the reason for the visit of the representative, ask for photo identification, never share personal information, compare the company name on any promotional material to the name on the contract, remember that consumers never have to sign a contract of this type on the spot, note that salespeople are required to leave when asked to do so, and please keep in mind that many companies, municipalities, government agencies, and regulatory organizations do not send salespeople door-to-door. [10]
Links
- Consumer Protection Act
https://www.ontario.ca/laws/statute/02c30#BK54 - CPA Regulation O. Reg. 17/05
https://www.ontario.ca/laws/regulation/050017 - Bill 59, Putting Consumers First Act
https://www.ola.org/en/legislative-business/bills/parliament-41/session-2/bill-59 - Contracts: Best Practices and Types
https://www.ontario.ca/page/contracts-best-practices-and-types - Door-to-Door Sales and Home Service Contracts
- Ontario Bans Door-to-Door Sales
https://www.carp.ca/2018/02/27/ontario-bans-door-door-sales/ - Ontario Ban on Door-to-Door Agreements for HVAC Products
https://www.airdberlis.com/insights/blogs/energyinsider/post/ei-item/ontario-ban-on-door-to-door-agreements-for-hvac-products-comes-into-effect-on-march-1-2018 - Ontario Bans Door-to-Door Sales, But There are Some Exceptions
https://globalnews.ca/news/4051299/ontario-door-to-door-sales-ban/
[1] Direct agreements are used by salespeople that sell goods or services on the road and go to customer homes to sign contracts. They are consumer agreements concluded in person at a place other than a place of business. See “Contracts: Best Practices and Types” at https://www.ontario.ca/page/contracts-best-practices-and-types
[2] See https://globalnews.ca/news/4051299/ontario-door-to-door-sales-ban/
[3] See section 35.1 of the CPA Regulation at https://www.ontario.ca/laws/regulation/050017
[4] Ibid.
[5] See the Consumer Protection Act s.116 at https://www.ontario.ca/laws/statute/02c30#BK54
[6] See section 35.3 of the CPA Regulation at https://www.ontario.ca/laws/regulation/050017
[7] See https://www.airdberlis.com/insights/blogs/energyinsider/post/ei-item/ontario-ban-on-door-to-door-agreements-for-hvac-products-comes-into-effect-on-march-1-2018
[8] See Bill 59, Putting Consumers First Act at https://www.ola.org/en/legislative-business/bills/parliament-41/session-2/bill-59
[9] See the Canadian Association of Retired People 90% poll results in favour of the ban on unsolicited door-to-door sales at https://www.carp.ca/2018/02/27/ontario-bans-door-door-sales/
[10] See https://www.ontario.ca/page/door-door-sales-and-home-service-contracts#Rules