Menu
Posted in , on 2015-10-23by Shoko (Consumer Protection BC) :: Tags: Regulated by us, Direct sales contracts :: Comments (20)
1 Shares
Written by Consumer Protection BC’s enforcement inspector
Are you planning to have some work done on your home? Perhaps have a new roof or driveway installed? One of the things you may want to consider is whether a deposit is required to seal the deal. Deposits are fairly standard and the amount can vary from business to business. However, be cautious if the business requires what seems to be an unreasonably large deposit or requests payment in cash. These may be warning signs of future trouble so if you’re not feeling comfortable, follow your gut.
What is a direct sales contract?
These contracts are typically signed during a visit from a door to door salesperson. They are also referred to as door-to-door sales contracts. Here are some examples:
- Someone comes to your door to see if you need work on your home or property such as tree work, window cleaning, or driveway paving
- Someone comes to your door and is selling heating, ventilation, or air conditioning equipment
- Someone comes to your door and is selling a specific item such as a vacuum cleaner
If your contract is a direct sales contract, the Consumer Contracts Regulation specifies how much a business is allowed to charge for a deposit.
What do you need to know about deposits?
With door to door sales contracts, your down payment can’t be more than $100 or 10% of the total price – whichever one is less. So if the total estimated price of the work is $2,000, your deposit can’t be more than $100. In this case, 10% of $2,000 is $200 so $100 is what the business is allowed to charge as a deposit. If you are charged more than the allowable maximum, the contract is not binding and you have the right to cancel and receive a full refund.
Consider the following tips before you make a decision:
Before handing over your hard-earned money, be sure you’re happy with the business you’re considering for the job. Do some background checks or ask the business to provide some references. If the business does require you to put down a deposit, ask questions such as:
- What their policies are around deposits and, specifically, are they refundable?
- Will you get your deposit back if you simply change your mind?
- Will you get your deposit back if the business is unable to provide the services for some reason?
- If the business has already purchased the required materials for the job, but you want to back out of the contract before the actual work starts, how much of your deposit, if any, will be returned?
And don’t forget to read your contract carefully first! Taking these steps before you pay will help to ensure peace of mind and a mutually satisfactory experience for you and the business. I hope next time you get into any direct sales situation whether it’s for work around your house or a product, remember some of these tips to protect yourself!
ADDITIONAL READINGS:
Don’t buy into a home renovation scam!
Salesperson at your door? Know your rights!
Consumer Question: how can I tell if a contractor is legit?
Everything you ever wanted to know about door-to-door sales…
1 Shares
My landlord arbitrarily decided after one year of residency that I was not a tenant but rather a roommate!
Other than being a roommate disqualifies me from LTA protection!
Is he not required to put the distinction in writing?Reply
Hi Rick, thank you for posting your question. It’s our understanding that in BC, the Residential Tenancy Branch takes care of these issues so they may be better suited to answer your question. Here’s a link to their website. I hope they will be able to provide you with further information.
Reply
A non profit group offered a position to caretake with free rent and small stipend/month. In the end we paid out/they collected $ for each month our stay and were in errers. Every other person before us got to receive the stipend. Their comment is the government tax will pay us back for amount we paid out. The work was way more than advertised and when I asked to change to past ways of caretakers-“this is their best interest as a non profit to collect”. I found they broke the employment standards acts and failed to provide rental forms thru out the position. We confronted them and they chose to give us no cause departure and in the end gave us 1/2 of what they offered. The manager left the threat of nothing $0 giving back but I used the rental/labor boards in writing suggestions and got the $1/2 amount offered back. We actually did get all our $ back due to oversight, but would like to leave warning for others taking this care taking position. Is this a good place to leave transaction record? Their treatment was more like a unpaid servant position. I have records of responses by emails/texts and 1 gets a pretty good picture of manager. “It’s ok to let caretaker pay $ and get $ back by government but have proof of tax refund and no where near their beliefs.
Reply
Hi Janet, thanks for your questions. I’m not totally sure I understand the situation. I know we don’t oversee anything related to employment standards – but I’m not sure that’s what you’re looking for specifically. Would you mind calling our inquiry centre for additional information? Our phone number here is 1.888.564.9963
Reply
we moved into a great deal and no leaks motorhome to find out after 3 weeks in was in habitable. we gave him 3000. deposit for a motorhome and he now refuses to return deposit? what are my rights
Reply
Hi Stefania, thanks for reaching out to us here. We don’t have authority when it comes to quality of service and deposits for motorhomes, but I’m happy to provide some information and a couple referrals. If you are unhappy with the motorhome, I would suggest reviewing the contract you signed to find out what exactly it said about whether or not the deposit was refundable. If you bought it through a licensed dealership in BC, you may be interested in contacting the Vehicle Sales Authority, as they regulate dealerships in the province. Here is a link to their contact info: https://mvsabc.com/contact-us/.
If you gave the deposit to a private seller and you are unhappy with the result, your recourse would likely be through the courts. For legal information you can speak with a lawyer for up to 30 minutes for about $25 through the Lawyer Referral Service offered by the Canadian Bar Association. Here’s a link to more info on that: https://www.cbabc.org/For-the-Public/Lawyer-Referral-Service. You may also be interested in finding out more about the Civil Resolution Tribunal (CRT) – The CRT can help you try to resolve small claims disputes under $5,000. We’ve written a blog post about what to expect in these situations here: https://www.consumerprotectionbc.ca/2017/09/resolving-small-claims-strata-disputes-online-expect-crt/.
I hope this is useful information to you and best of luck.
Reply
While helpful, the above article says nothing about ‘regular’ contracts for service, such as hiring a contractor to do a house addition, or a flooring store to install new floors.
Are there any BC laws regulating how much a consumer is obligated to pay a trade / service provider / contractor ‘up front’?
A vendor told me recently that their required deposit is the cost for all materials (i.e. the only thing left to pay at the end of the job is the labour).
This seems excessive. Am I legally correct? Or are there no laws?
Reply
Hello and thank you for your question! As far as we know, in BC, the laws do not specify what businesses are allowed to charge for contract deposits OTHER than the situations like above (direct sales contracts so mostly door-to-door sales). That’s why we always encourage people to look over the contract carefully and read the fine print before signing.
Reply
The maximum deposit is 10% or $100, whichever is the least. Read Consumer Protection Act on line.
Reply
Allen, that maximum is only for direct sales in the field. So, a salesman that comes to your door or business and solicits your business in a cold-call type situation falls in this category. If you contact your salesman and he comes out, that doesn’t count. You started the negotiation at his business.
Reply
I was asked by a tattoo shop to put a $200 deposit down on what would be in the end after a couple of appointments be about $1000 work. Also they state that there is a two week cancelation policy or you don’t get your $200 back.
After getting the runaround multiple times with this business canceling my appointment time last minute more than once and not answering my calls or text messages I only managed to get half the work done. Then I was booked for a second appointment and I had to cancel the day before but was able to rebook that for a couple of months ahead again….. so then after again not having my texts or calls answered for any further consultation for the remainder of the work that was to follow I simply gave up on the idea and asked for a refund of my original $200 three weeks before my appointment date.
So by asking for my money back I finally received an immediate reply ( haha go figure ) and was told that he “ felt a bit shafted” so therefore I only received half of my $200 deposit back.
Does any of this sound right to you ? Please help ! Is there someone I can call ?Reply
Hi Dan, this sounds like a tricky situation. Would you be able to submit a formal complaint using our online form? We would like to get more details from you and once we receive your complaint, someone from our team will get in contact with you. Thank you, Dan!
Reply
I’m curious, can businesses charge a non refundable deposit for design plans?
I was going to be doing a kitchen renovation and was told I had to put down a non refundable $500 for the plan. Once I had looked over the plans closely the kitchen wasn’t like I wanted and the more I talked with the designer at the company the less the plan became about what I really wanted to be what the company thought I should want.
After deciding this isn’t going to work out with the company is it possible to go and request a refund for the non refundable deposit if I never signed any paperwork for the deposit?
Reply
Hi Shannon, this blog post talks about direct sales contracts or door-to-door sales contracts. It sounds like your situation would fall under future performance contracts (more info about that here). If you were not given a copy of the contract like you mentioned, the business failed to meet the requirements and you should be able to cancel and get your deposit back. On the link I provided, there is a dropdown box that says “how do I cancel my contract?” so take a look there and fill out the form. Follow the instruction on the page and if you have any problems getting the money back, please contact us. I hope this information is helpful to you!
Reply
put downpayment on hot tub over 1 year ago (dec 18 2020) still have not received. Promises to deliver last march, june, sept, nov, and now for sure Dec 24th. still , no hottub. credit card says delivery of product must be within 190 days in order to reverse charge. contract states non refundable deposit, but is there any protection for consumer when item not delivered in over a year!?
Reply
Hi Betty, thanks for your question. If your online order does not arrive within 30 days of the expected delivery date (or within 30 days of the order if there was no delivery date), then you have a right to cancel your “contract” with the business and request a refund. Here’s more information on how to do that and the proper steps to follow to request a refund: https://www.consumerprotectionbc.ca/2017/08/online-shopping-tips-order-never-arrives/. Please let me know if you have any questions!
Reply
Is it against consumer law to refuse warranty on service or work if you dispute cost? Quote for service was done, then told it would be extra 300, but when service done business wanted way more. Now if I dnt pay they wont warranty item.
Reply
Hello and thank you for contacting us here. Once the actual work starts, it becomes a quality of service issue and BC’s consumer protection laws do not apply. Warranties are unfortunately unregulated in BC so there are no organizations that can assist you with this issue. The only thing we can suggest would be to contact a lawyer and see if there are any other protections (we are not aware of all the rules outside of our jurisdiction). Access Pro Bono has a Lawyer Referral Service and you may be able to access a lawyer for free, for up to 30 minutes. Here is their website information. Sorry, we can’t be more helpful.
Reply
I put a deposit down for a travel trailer but the company never collected the deposit until after I canceled the order? Is this possible?
Reply
Hi John, thanks for your question.
If you were purchasing the travel trailer in person, you would need to go back to the dealer and try and work out a solution with them. If you were purchasing this trailer over the phone or online, you may have entered a distance sales contract, and can use the forms found on our website to help come to a resolution. Hope this helps!Reply
Leave a Reply
[avatar]
Shoko (Consumer Protection BC)
Shoko works in communications and marketing for Consumer Protection BC. She is our regular blogger and is always looking for topics of interest to BC consumers. Feel free to ask a question related to any of our posts by posting a comment!
