Door-to-door sales contracts have been among the top complaints received by the Ministry of Government and Consumer Services. Starting March 1, 2018, Ontario has banned unsolicited, door-to-door sales of certain household appliances to better protect consumers from aggressive and misleading contracting at home. This will bring about some changes for some companies business model and marketing strategies.
Who does the new rule on door to door sales apply to?
The new rules will apply to:
- Air cleaners
- Air conditioners
- Air purifiers
- Duct cleaning services
- Water filters
- Water heaters
- Water purifiers
- Water softeners
- Water treatment devices
- Any goods or services that are a combination of or that perform the functions of the goods or services listed above (e.g., bundles of such goods or services (HVAC)).
These above businesses with the specific goods and services were targeted because of the many aggressive sales tactics and scams that are typically used to sell them.
What are the new door-to-door sales ban rules?
The rules are found in Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017 (Bill 59) and banned unsolicited, door-to-door sales guidelines posted on the Ontario Government website.
Businesses will only be able to enter into a contract in the consumer’s home if the consumer has contacted the business ahead of time and invited them into their home for the purpose of entering into a contract. Contracts that are in violation of the new rules relating to door-to-door contract solicitation will be considered void, and consumers will be able to keep the goods and services with no obligations.
If a consumer calls for a repair, maintenance or any other reason, businesses are only allowed to leave information about the products and services they offer, unless the business has a written contract in place with the consumer and secures the consumer’s approval in advance of the visit to solicit a contract for the restricted goods or services.
In addition, businesses are required to keep a record of how contact with the consumer entering the contract was made, and all contracts signed in the home for these goods and services also have a 10-day cooling-off period, allowing consumers to cancel the contract for any reason without penalty. The records must be kept up to three years.
It is important to note that leaving marketing materials at the consumer’s home without attempting to make contact is not considered solicitation (e.g., leaving the materials at the doorstep). Notwithstanding this exception, suppliers should be mindful of “no flyer” notices posted at consumers’ homes. Additionally, suppliers should be cognizant of the unfair practices section of the Act, which prohibits false, misleading, deceptive or unconscionable representations. If the marketing materials left at the consumer’s home contain any such representations, then such marketing materials will constitute solicitation – in contravention of the Act (Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017 (Bill 59)).
Ontario is the second province in Canada to restrict door-to-door solicitation and contracts. Alberta’s law came into force January 1, 2017.
According to Tracy MacCharles, Ontario Minister of Government and Consumer Services, “These new laws will ensure that people aren’t being taken advantage of through unsolicited door-to-door contracting. We have heard from many consumers, including many seniors, who are being taken advantage of at their doorsteps. Our government is taking steps to protect Ontario consumers and provide them with more protection against aggressive and misleading door-to-door contracting tactics so that they can enjoy peace of mind in their homes.”
Suppliers and vendors should understand their obligations and the new requirements under the Act, and review their procedures and documentation to ensure compliance.