Door-to-door Misrepresentations - Sotos Class Actions
June 13, 2019

Door-to-door Misrepresentations

Most people have had the experience of a pushy door-to-door sales representative who will not take ‘no’ for an answer.  Unfortunately, these sales tactics often result in homeowners being misled and pressured into signing contracts they don’t fully understand, for products that don’t perform as they were led to believe they would.

Ontario has banned the door-to-door sale of certain household products and appliances. These include water heaters, furnaces, air filters and water purifiers. Still, many people have found themselves stuck with exorbitant monthly bills stemming from contracts they can’t get out of.  In some cases, the fine print of the contracts entitles the companies to place liens on the consumer’s home, often requiring the consumer to pay out thousands of dollars before the home can be sold.

I recently helped a client get out of an unfair contract that she entered into on her doorstep. She had signed two equipment rental agreements with a company called Ontario Green Solutions. One agreement was for an air filter, and the other was for an appliance that reduces energy consumption. The salespersons told her that they worked for the government of Ontario. They said they were responsible for upgrading all the homes in her area, as part of a government program to make homes more energy efficient. These were lies.

After the equipment was installed, she quickly realized that the products did not perform as advertised. The fine print on the contract revealed that a company called Skymark Finance Corporation financed the rentals. Skymark, she discovered, had placed a lien on her house for over $10,000. She made numerous attempts to contact the sales company and the financing company to have the equipment removed and the contracts “rescinded” (meaning cancelled with all money paid up to that point reimbursed). For over a year, they gave her the run-around, and she finally felt she had no choice but to file a claim.

I took on the case pro bono. At trial, we successfully argued that the door-to-door sales representatives had violated the Consumer Protection Act. They had misrepresented that their products were endorsed by the government. The judge decided that both Ontario Green Solutions and Skymark were equally responsible.  Consequently, the court rescinded both contracts and removed the lien from her home.

This is just one person. You can imagine how many people are stuck in similar costly agreements, all because of unfair pressure tactics and lies.

Ontario's door-to-door sales rules

Ontario has laws to protect consumers from door-to-door sales. In 2018, the government tightened the laws to ban certain door-to-door sales outright. The Ontario Consumer Protection Act (CPA) offers some protection for consumers in these situations.

Regulations under the CPA limit how businesses can sell you certain home products and services, like furnaces and air conditioners, air cleaners and purifiers, duct cleaning, water heaters, and water purifiers, filters or other treatment devices.

Businesses that sell these things cannot come to your home uninvited to rope you into a contract. (Your current service supplier can.) The upshot is that you must contact the business in advance to inquire about a service contract before its salespeople can get you to sign at the door. It's still ok for businesses to leave information about their products and services, for you to decide later.

If a pushy salesperson comes to your home and gets you to enter into an agreement for one of these products or services that costs more than $50, you have the right to cancel in certain circumstances:

  • You can cancel for any reason within 10 days from the day you receive a written copy of the agreement. This is called a "cooling-off period."
  • You can also cancel within one year, if the contact does not include specific information about the goods or services, or your rights as a consumer, as specified by the Consumer Protection Act.
  • You also have the right to cancel within one year, regardless of the value of the contract, if the salesperson you signed the contract with made any false or misleading statements regarding the product or the contract.

The rules don't apply to other products and services that aren't on the list, businesses still have to comply with the rest of the CPA. You know, not to lie to, grossly overcharge, or apply undue pressure to consumers.

Know your rights

High-pressure sales tactics work. And consumers are especially vulnerable at their door. They may not have the time or resources on the spot to consider whether the agreement is beneficial, or see what the competition has to offer.

If someone tries to sell you something at your door, know your rights.

Make sure you ask the right questions. Find out what company the salesperson represents, and what company is named in the contract. Ask how long the agreement lasts, whether it renews automatically, and what happens if you cancel or if the product or service fails. If you already have an agreement with a competing business, call them up. They can tell you if they can offer a similar deal, and warn you if there are penalties for breaking your existing agreement.

The Ontario government offers resources to help you file a complaint about door-to-door sales.