Direct selling is house-to-house selling. It includes sales made by individuals who sell at parties you host in your home, and also salespeople who knock on your door. In some cases, sales made by an individual who asked to come to your home, such as a visit arranged by a telemarketing call, would be considered direct selling.
Direct sellers are required, with some exceptions, to be licensed and bonded under the Direct Sellers Act. They must carry this licence with them, proving that he or she is associated with a licensed company—you should ask to see it. These licences are non-transferrable. As part of this licensing process direct sellers must undergo a criminal record check. This helps protect consumers by providing a screening process for individuals entering your home.
When you’ve agreed to purchase more than $100 of goods or services from a direct seller, they must present you with a contract. If you’re not provided with a copy of the contract at the time of purchase, you’re entitled to extended cancellation rights from ten days up to one year.
Before signing a contract, be sure you’ve read it through and that you fully understand it.
Do not sign a contract on impulse, and always get a copy of the contract. The contract must be signed by both you and the salesperson. Have the salesperson sign the contract first—you should be the last person to sign it.
The contract must include:
- your name and address
- the salesperson’s name and the name, address, and phone number of the company they represent
- the date and place the contract is made
- a description of the goods or services you’ve purchased
- the number of items purchased and the price of each
- a description of any goods taken as a trade-in
- the total cost
- the terms of payment
- the total cost of credit (if the product was financed with the direct seller)
- date of delivery or completion date for the provision of services
- cancellation policy
Cancelling a purchase
You have a 10-day “cooling-off” period from the day you receive the contract or statement of cancellation. Within these 10 days you do not have to give a reason for cancelling the sale. The “cooling-off” period may be extended from 10 days to up to a year from the date you received the contract or cancellation statement if the vendor or salesperson was not licensed at the time the purchase was made, or if the seller fails to meet the terms of the contract. You are also entitled to extended cancellation rights if the goods or services are not supplied to you within 30 days of the delivery date. But if the goods or services do arrive after the 30-day period and you accept delivery, you lose the right to cancel. To cancel, you must send a notice of cancellation in writing to the address specified on the cancellation statement or the contract. Send the notice by fax or registered mail so you have proof of when the notice was sent.
The seller has 15 days from the date your notice was sent to refund any money paid and return any trade-in (or an amount equal to the market value of the trade in). You then have to return the goods purchased once you receive your money or trade-in. You must also pay a reasonable amount for any goods that you used or services that the seller performed. However, the seller cannot claim payment until after making a full refund.
Tips for buying from direct sellers
When buying goods or services from your home, there are guidelines to follow.
- Ask to see the salesperson’s licence. Check that it is not expired, that the seller is representing the vendor specified in the licence, and that it has been signed by the director of consumer affairs and the salesperson.
- Do not let a seller pressure you into buying. Be careful if the seller says that it’s a one-time offer only available now.
- Read the contract before you sign it and be sure you fully understand what you are signing.
- Do not commit to payments above what you can afford.
- Do not be pressured into signing on the spot. Get a copy of the contract and take the time to read it. Be sure it includes the company and salesperson’s name, a description of the goods or services, price information, and information about cancelling the sale.
- If the contract the seller presents to you is electronic (for example, on a tablet) take the time to read it, or ask for a paper version.
- Have the salesperson sign the contract before you do. You should be the last one to sign the contract and only after you have read all the details, checked that the contract details are correct (such as date and price), and you understand the content of the contract.
- Keep your deposits small, and do not pay for goods or services in full up front.
- Ask about and compare cash price, credit price, warranties, and service.
- Be sure you understand what you’re signing up for—for example, does the offer you’re agreeing to include credit or financing?
- Remember that if a deal sounds too good to be true, it probably is.