Difference between revisions of "The Basics of Making a Purchase"

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{{REVIEWEDPLS | reviewer = [http://davisonnorth.ca/personnel/dean-davison/ Dean Davison], Davison North Law |date= January 2020}} {{Dial-A-Law TOC|expanded = consumer}}
A cup of coffee. A bus ticket. A new big-screen TV. Another day, another purchase. Learn your rights and what to watch out for when buying things.


{{Dial-A-Law TOC|expanded = credit}}
==What you should know==
This script discusses dishonest business practices, misleading advertising, deceptive telemarketing, scams, and business schemes to stay away from.


==Consumers are protected against dishonest business practices==
===You're making a contract===
In addition to other federal and provincial laws, BC’s ''[http://www.bclaws.ca/civix/document/id/complete/statreg/04002_00 Business Practices and Consumer Protection Act]'' (the Act) protects consumers against misleading advertising and dishonest sellers. It prohibits two unfair practices:
When you buy something, even something small, you’re making a contract. Most of the time, the receipt is the only proof you’ll have! Regardless, you and the seller have certain legal rights and obligations.
#deceptive acts and practices
#unconscionable acts and practices


==The Act applies to transactions and sales between “consumers” and “suppliers”==
===The seller must not mislead you===
A supplier is basically a business or someone who is in the business of promoting, advertising or conducting consumer transactions. So it covers the department store, but not your neighbour who has a garage sale once a year. A consumer is someone who buys, rents or leases something for their own personal, family, or household use. The Act applies to sales, transactions or advertisements involving goods, real estate, services or credit, but it doesn’t cover securities or insurance.
Sellers can’t mislead you to convince you to buy something. What’s misleading?


==Deceptive acts and practices==
* If they offer you a special “30% discount” but, really, everyone can get that special price.
These include any oral or written statements, visual or descriptive representations, or conduct by a seller that can deceive or mislead a consumer. For example, it’s deceptive for someone selling roofing products to say that your house needs a new roof when it doesn’t. And it’s deceptive for a car dealership to tell you that a car you’re interested in was previously owned by a senior citizen when, in fact, it used to be a taxi.
* If they tell you the TV can play Netflix, but you get it home and realize it can’t.
* If the mortgage lender says they are “CMHC approved,” but really they aren’t.


==Unconscionable acts and practices==
This is when a seller advertises something at a bargain. But guess what, it isn’t in stock.
Unconscionable acts are unscrupulous or dishonest sales practices often involving high-pressure sales tactics. Was a lot of undue pressure put on you to persuade you to enter into the consumer transaction? Were you taken advantage of because of your age or inability to understand the nature of the deal? Was the price much more than the price for similar products sold elsewhere?


==If a business commits a deceptive or unconscionable act==
You only discover this once you’re in the store. The “bait” is sold out. Now the seller tries to “switch” you to some other (typically more expensive) item.
[https://www.consumerprotectionbc.ca/ Consumer Protection BC] can investigate your complaint. They can issue “compliance orders” forcing suppliers to comply with the Act and possibly reimburse any money that consumers lost. In extreme and rare cases involving many consumers who have lost a lot of money, Consumer Protection BC could freeze the supplier’s bank account and sue it. In serious cases, the supplier could also be charged with an offence under the Act and fined.


==Suing the supplier==
They can’t do that. Such unfair practices are against the law.
You can use Small Claims Court if your claim is for less than the limit of $25,000. If you win, the court may give you a judgment for “punitive damages” to punish the supplier, in addition to ordering compensation for your financial loss. But before suing, try to resolve the problem. You can do this yourself, through a lawyer, or perhaps with the help of the [http://www.bbb.org/ Better Business Bureau].


==The federal ''Competition Act'' also prohibits misleading price advertising==
===The seller must not act unfairly towards you===
One example is “bait and switch” tactics. They are against the law. In general, if a business advertises a sale, it must stock sufficient items at the bargain price or give you a rain check, rather than use high-pressure sales tactics to get you to buy a different, more expensive item. Also, if there’s more than one price tag, the store must charge you the lowest price, unless the lower price has been crossed out or covered up.
Sellers can’t act unfairly. What’s unfair?


==Deceptive telemarketing==
* They charge you a price that’s far higher than what other sellers are asking for the same thing.
Some companies use deceptive practices when trying to sell you something over the phone. They’ll call saying that you’ve won a prize, and all you have to do is pay for the shipping and handling fees or give your credit card number for verification purposes. Or they offer to sell you something that sounds like a really good deal, but you end up with a cheap plastic watch instead of the expensive watch you expected. This is deceptive telemarketing. Deceptive telemarketing is prohibited by the ''[http://laws-lois.justice.gc.ca/eng/acts/C-34/ Competition Act]'' and is a criminal offence.
* They pressure you — a seller tells you that you have to sign a contract immediately to get the “special price” they’re offering.
* They try to get you to buy something they know you can’t afford.


==Telemarketers must follow rules==
Sellers can’t take advantage of any physical or mental disability, illiteracy or language difficulties.
BC’s ''[http://www.bclaws.ca/Recon/document/ID/freeside/18_83_2005 Telemarketer Licensing Regulation]'' applies to telemarketers operating in BC who contact consumers to buy something over the phone and to third-party fundraisers. This regulation helps protect consumers by licensing and regulating telemarketers, and imposing penalties for violations of the regulation. For example, a licensed telemarketer may contact you only on weekdays between 9:00 a.m. and 9:30 p.m. and weekends between 10:00 a.m. and 6:00 p.m., and they can’t communicate with you on statutory holidays.


==Dealing with telemarketers==
For example, a seller can’t force people whose first language is Mandarin to sign a complicated contract in English.
If you get an unsolicited phone call to buy something, don’t give out information about your bank or credit card, and don’t be afraid to hang up. Telemarketers who phone you offering prizes or products for sale must tell you who they work for. To reduce the number of unsolicited calls, contact the [https://www.lnnte-dncl.gc.ca/index-eng National Do Not Call List registry].  [http://www.consumerprotectionbc.ca/ Consumer Protection BC] may also be able to help if you have a problem.


==Canada’s new anti-spam law starts July 1, 2014==
If the seller does something unfair, then the agreement isn’t binding. That means you can return what you bought for a refund.
Canada’s anti-spam law started on July 1, 2014. It aims to protect people and businesses from spam (junk email and text messages) and online threats (spyware, malware, phishing scams, etc.) originating in Canada. It’s called the ''[http://laws-lois.justice.gc.ca/eng/acts/E-1.6/index.html Electronic Commerce Protection Act]''. Unfortunately, the law cannot control businesses and people outside Canada, and they produce huge amounts of spam and online threats. One part of the law created a private right of action. It would let you sue for violations of the law, and it was due to take effect on July 1, 2017. But the federal government has [https://www.canada.ca/en/innovation-science-economic-development/news/2017/06/government_of_canadasuspendslawsuitprovisioninanti-spamlegislati.html suspended it] indefinitely to review it.


'''Consent is required'''—a key section of the law requires senders of commercial emails and text messages to have the consent of the person they’re sending the message to (the recipient). The law also prohibits installation of computer programs and collection of electronic addresses without consent, as well as false and misleading representations.
===You’re protected by the legal warranty===
The things you buy must meet a baseline level of quality, the law says. When you purchase something from a business, the product has to:


'''Two types of consent''': [http://fightspam.gc.ca/eic/site/030.nsf/eng/00304.html#q1 express and implied]. There is implied consent if there is already a relationship between the sender and recipient of a commercial message. It lasts for 2 years. Recipients can cancel implied consent any time. Senders of commercial messages can ask recipients for express consent (the recipient agrees to receive messages) to send commercial messages. It does not expire. Senders of commercial messages must keep records to show they obtained the recipient’s consent. The Canadian government’s anti-spam [http://www.crtc.gc.ca/eng/internet/infograph.htm website compares implied and express consent in detail].
* be fit for the purpose you bought it for
* be undamaged and work properly
* be durable for a reasonable period of time
* match the advertised description


'''Senders must identify themselves and let recipients unsubscribe'''—in addition to getting consent from recipients, senders of commercial messages must identify themselves and include an unsubscribe option in the message so recipients can stop receiving messages.  
These conditions are sometimes referred to as '''the legal warranty'''.


[http://fightspam.gc.ca/eic/site/030.nsf/eng/h_00039.html Three federal government agencies enforce the law]: the [http://www.crtc.gc.ca/eng/home-accueil.htm CRTC], the [http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/home Competition Bureau], and the [https://www.priv.gc.ca/en/ Office of the Privacy Commissioner of Canada].  
So if that big screen TV doesn’t turn on (and you’ve already made sure you plugged it in 😉), you can bring it back for a refund, or ask to get it repaired or replaced at no charge.


Details on the new law are available on the [http://fightspam.gc.ca/eic/site/030.nsf/eng/home Canadian government’s anti-spam website].
If you buy from an individual (think: deals on Craigslist or Facebook Marketplace), the legal warranty is weaker. The product only has to be reasonably durable and match the advertised description. So pay special attention (and adjust your expectations accordingly) if you’re buying that TV from a guy named Fred and not from Best Buy.


==Business schemes to be wary of==
===Do your homework on any extended warranty===
Many business schemes that promise you’ll get rich quick will only cause you to lose money or are illegal. Consider “multi-level marketing”. It involves selling a service or products through distributors who earn money by supplying the service or product to other participants in the venture. They, in turn, make their money by supplying the same or another service or product to other participants. Typically, consumer products such as cosmetics, jewelry or cleaning products are sold in customers’ homes. Promoters asking you to get involved are not allowed to make exaggerated claims. And any claims made about expected earnings must be fair and reasonable and include the average compensation earned by the typical distributor in that business, and the time and effort needed to reach specific levels of income.
On top of the legal warranty, many sellers and manufacturers offer their own warranty or guarantee for their product. If it’s free, great. Just make sure you’re not being sold an '''extended warranty''' you don’t need.


==A pyramid scheme is an illegal type of multi-level marketing==
An extended warranty may or may not be worthwhile. Do your homework. And keep in mind: sellers count on at least some customers forgetting they bought the extended warranty!
Typically, with pyramid schemes, the focus is on recruiting new distributors, not on selling the product. You’re promised that by buying a distributorship, you can make money by recruiting other people to be distributors. If those new distributors recruit other new distributors, everyone up the pyramid will get a share of the recruitment fee. But simple arithmetic shows that after only a few recruitment levels, everyone in BC would be distributors, with no one left to be buyers!


==If you’re a victim of an unlawful multi-level marketing scheme==
If you're thinking about an extended warranty, check its terms:
Contact the [http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/home Competition Bureau]. The toll-free phone number is 1.800.348.5358. A person convicted of promoting a pyramid scheme can be sentenced to a fine or up to 5 years in jail, or both.


==Franchises==
* How long is it good for?
A “franchise” involves the “franchisor” granting the “franchisee” the right to use a particular system of carrying on business or the right to sell a certain product or service. In return, the franchisee typically pays a fee and ongoing royalties to the franchisor. Be cautious, however, of franchises that consist of selling a product through automatic vending machines or on display racks. You may be promised lucrative high-volume locations and told that all you have to do is keep the machines or racks stocked—and collect the money. But, in fact, the locations are often poor and the sales figures only a small fraction of those promised. After paying thousands of dollars, you may be stuck with some greatly overpriced vending machines and unsellable products.
* If the item breaks, will the company repair it, replace it, or return your money?
* Can you take it back to the store where you bought it? Or will you have to ship it somewhere at your own cost?
* Sometimes, if you try to repair it yourself (or at a corner shop instead of an “authorized dealer”) it could void the warranty altogether!


==Work-at-home schemes and chain letters==
==Take action==
Work-at-home schemes urge you to send away money to learn how you can make good money working from your home. But these schemes are misleading. And chain letters inviting you to send and receive money are illegal under the ''Criminal Code''.
Think you’re ready to buy? Wait a tick. Here are a few practical tips to keep in mind.


==Other scams==
===Step 1. Do your research===
Watch out for scams involving the sale of office supplies, listings in directories and phoney invoices. In the office supply scam, for example, an employee of yours will get an unsolicited call implying that your business has agreed to accept shipment of paper and office supplies, when you haven’t ordered them. When the supplies arrive, you discover that they cost way more than the going rate and are inferior.
First and foremost, Google, Facebook, Yelp, etc. These are the quickest and easiest ways to determine if a seller is legitimate, has the best prices, and can be trusted.


==Before investing money in any business, investigate carefully==
Don’t forget to check more credible sources. For example, if you’re buying a car, try the Canadian Black Book or AutoTrader to learn the average price of the vehicle models you’re considering.
A well-researched franchise may be an effective business. But you must see a lawyer and have a properly prepared franchise agreement. A legitimate multi-level marketing venture could also prove profitable if you invest time, effort and money. But there are many scams out there.


==Where can you get help or more information?==
Read reviews from trustworthy sources. Consumer Reports is an independent, non-profit source of product reviews. [https://www.consumerreports.org/ See their website].
*Call [http://www.consumerprotectionbc.ca/ Consumer Protection BC] toll-free at 1.888.564.9963.
*Check the [http://fightspam.gc.ca/eic/site/030.nsf/eng/home Canadian government’s anti-spam website].
*You can also contact the [http://www.mbc.bbb.org/ Better Business Bureau] at 604.682.2711 for mainland BC or 250.386.6348 for [http://www.vi.bbb.org/ Vancouver Island].
*For inquiries on the ''Competition Act'', call the [http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00139.html Competition Bureau] at 1.800.348.5358. 
*For inquiries relating specifically to dishonest selling practices with vehicles, contact the [http://mvsabc.com/ Vehicle Sales Authority of British Columbia] at 604.574.5050. It has information on consumer complaints and on advertising rules for motor vehicle dealers.
*For more information on telemarketers, check script [[Shopping by Phone, Mail or the Internet (Script 256)|256]] on “Shopping by Phone, Mail or the Internet”.


You can also get solid crowdsourced product reviews on sites like Wirecutter and @thingtesting. The Better Business Bureau also collects complaints about bad actors. [https://www.bbb.org/ca/bc Visit the BBB online].


[updated June 2017]
===Step 2. Negotiate with confidence===
Everything can be negotiated. Sure, haggling with your grocer over the price of a pear is a bit … thrifty. But for big purchases, don’t assume there isn't wiggle room.


Mention competing offers from other sellers. Businesses will often match or beat prices. Ask them to throw in the extended warranty or protection plan for free.


----
This can be especially effective with cellphones and other electronics. And when you do make an offer to the seller, say it with confidence. Be polite and reasonable, but firm.
----


===Step 3. Have a contract===
If you’re buying something expensive, get it in writing, especially if you’re dealing with a private seller.


If a problem arises, you can go back to the written contract. You won’t have to argue over “who said what” when you struck the agreement.
Law can be tricky, but it isn’t rocket science. We’ve got a great template to get you started. [https://www.peopleslawschool.ca/template-basic-contract/ Here's a basic contract template].
===Step 4. Read and understand any contract===
Read the fine print on any contract before you sign.
* Go over every section of the document, including any text on the reverse side of printed pages.
* Ask the other party to explain what something means if you don’t understand it.
* Fill in all areas of the document. If there are blank spaces, put a line through them to prevent something being added in later. If you do that, make sure both of you initial the strikethrough as proof you understood.
===Step 5. Don’t rush the decision===
If the other party makes a counteroffer to your original offer and you’d like to think about it, that’s OK. You can simply stop the deal if you feel like you’re being pressured into paying too much or buying additional features.
==Who can help==
===Helpful agencies===
Shoddy goods? Seller refusing to give you a refund? If you need help with that or other consumer-related issues, we’ve got content on that. [https://dialalaw.peopleslawschool.ca/buying-defective-goods/ See our information on problems with a purchase]. Or, consider getting in touch with the following agencies.
:'''Consumer Protection BC'''
:Assists with some consumer problems and contracts. Includes online complaint form.
:Call 1-888-564-9963
:[https://www.consumerprotectionbc.ca/complaint-assistant/ Start a complaint]
:[https://www.consumerprotectionbc.ca/ Visit website]
:'''Better Business Bureau'''
:Receives complaints about local businesses that are members.
:Call 1-888-803-1222
:[https://www.bbb.org/ca/bc Visit website]
:'''Competition Bureau'''
:Deals with complaints about false or misleading advertising.
:Call 1-800-348-5358
:[https://www.competitionbureau.gc.ca/ Visit website]
===Legal advice===
Affordable legal help '''does''' exist. (To be fair, two of these are options for help, and the third — the online tribunal — is a low-cost path to bringing a legal action.)
:'''Lawyer Referral Service'''
:Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
:Call 1-800-663-1919
:[https://www.accessprobono.ca/our-programs/lawyer-referral-service Visit Website]
:'''Access Pro Bono's Free Legal Advice'''
:Volunteer lawyers provide 30 minutes of free legal advice to people with low or modest income.
:Call 1-877-762-6664
:[https://www.accessprobono.ca/get-legal-help Visit Website]
:'''Civil Resolution Tribunal'''
:Resolve disputes of less than $5,000 online 24/7 (no need for a lawyer!).
:[https://civilresolutionbc.ca/ Visit website]
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Latest revision as of 00:43, 7 November 2023

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Dean Davison, Davison North Law in January 2020.
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A cup of coffee. A bus ticket. A new big-screen TV. Another day, another purchase. Learn your rights and what to watch out for when buying things.

What you should know

You're making a contract

When you buy something, even something small, you’re making a contract. Most of the time, the receipt is the only proof you’ll have! Regardless, you and the seller have certain legal rights and obligations.

The seller must not mislead you

Sellers can’t mislead you to convince you to buy something. What’s misleading?

  • If they offer you a special “30% discount” but, really, everyone can get that special price.
  • If they tell you the TV can play Netflix, but you get it home and realize it can’t.
  • If the mortgage lender says they are “CMHC approved,” but really they aren’t.

This is when a seller advertises something at a bargain. But guess what, it isn’t in stock.

You only discover this once you’re in the store. The “bait” is sold out. Now the seller tries to “switch” you to some other (typically more expensive) item.

They can’t do that. Such unfair practices are against the law.

The seller must not act unfairly towards you

Sellers can’t act unfairly. What’s unfair?

  • They charge you a price that’s far higher than what other sellers are asking for the same thing.
  • They pressure you — a seller tells you that you have to sign a contract immediately to get the “special price” they’re offering.
  • They try to get you to buy something they know you can’t afford.

Sellers can’t take advantage of any physical or mental disability, illiteracy or language difficulties.

For example, a seller can’t force people whose first language is Mandarin to sign a complicated contract in English.

If the seller does something unfair, then the agreement isn’t binding. That means you can return what you bought for a refund.

You’re protected by the legal warranty

The things you buy must meet a baseline level of quality, the law says. When you purchase something from a business, the product has to:

  • be fit for the purpose you bought it for
  • be undamaged and work properly
  • be durable for a reasonable period of time
  • match the advertised description

These conditions are sometimes referred to as the legal warranty.

So if that big screen TV doesn’t turn on (and you’ve already made sure you plugged it in 😉), you can bring it back for a refund, or ask to get it repaired or replaced at no charge.

If you buy from an individual (think: deals on Craigslist or Facebook Marketplace), the legal warranty is weaker. The product only has to be reasonably durable and match the advertised description. So pay special attention (and adjust your expectations accordingly) if you’re buying that TV from a guy named Fred and not from Best Buy.

Do your homework on any extended warranty

On top of the legal warranty, many sellers and manufacturers offer their own warranty or guarantee for their product. If it’s free, great. Just make sure you’re not being sold an extended warranty you don’t need.

An extended warranty may or may not be worthwhile. Do your homework. And keep in mind: sellers count on at least some customers forgetting they bought the extended warranty!

If you're thinking about an extended warranty, check its terms:

  • How long is it good for?
  • If the item breaks, will the company repair it, replace it, or return your money?
  • Can you take it back to the store where you bought it? Or will you have to ship it somewhere at your own cost?
  • Sometimes, if you try to repair it yourself (or at a corner shop instead of an “authorized dealer”) it could void the warranty altogether!

Take action

Think you’re ready to buy? Wait a tick. Here are a few practical tips to keep in mind.

Step 1. Do your research

First and foremost, Google, Facebook, Yelp, etc. These are the quickest and easiest ways to determine if a seller is legitimate, has the best prices, and can be trusted.

Don’t forget to check more credible sources. For example, if you’re buying a car, try the Canadian Black Book or AutoTrader to learn the average price of the vehicle models you’re considering.

Read reviews from trustworthy sources. Consumer Reports is an independent, non-profit source of product reviews. See their website.

You can also get solid crowdsourced product reviews on sites like Wirecutter and @thingtesting. The Better Business Bureau also collects complaints about bad actors. Visit the BBB online.

Step 2. Negotiate with confidence

Everything can be negotiated. Sure, haggling with your grocer over the price of a pear is a bit … thrifty. But for big purchases, don’t assume there isn't wiggle room.

Mention competing offers from other sellers. Businesses will often match or beat prices. Ask them to throw in the extended warranty or protection plan for free.

This can be especially effective with cellphones and other electronics. And when you do make an offer to the seller, say it with confidence. Be polite and reasonable, but firm.

Step 3. Have a contract

If you’re buying something expensive, get it in writing, especially if you’re dealing with a private seller.

If a problem arises, you can go back to the written contract. You won’t have to argue over “who said what” when you struck the agreement.

Law can be tricky, but it isn’t rocket science. We’ve got a great template to get you started. Here's a basic contract template.

Step 4. Read and understand any contract

Read the fine print on any contract before you sign.

  • Go over every section of the document, including any text on the reverse side of printed pages.
  • Ask the other party to explain what something means if you don’t understand it.
  • Fill in all areas of the document. If there are blank spaces, put a line through them to prevent something being added in later. If you do that, make sure both of you initial the strikethrough as proof you understood.

Step 5. Don’t rush the decision

If the other party makes a counteroffer to your original offer and you’d like to think about it, that’s OK. You can simply stop the deal if you feel like you’re being pressured into paying too much or buying additional features.

Who can help

Helpful agencies

Shoddy goods? Seller refusing to give you a refund? If you need help with that or other consumer-related issues, we’ve got content on that. See our information on problems with a purchase. Or, consider getting in touch with the following agencies.

Consumer Protection BC
Assists with some consumer problems and contracts. Includes online complaint form.
Call 1-888-564-9963
Start a complaint
Visit website
Better Business Bureau
Receives complaints about local businesses that are members.
Call 1-888-803-1222
Visit website
Competition Bureau
Deals with complaints about false or misleading advertising.
Call 1-800-348-5358
Visit website

Legal advice

Affordable legal help does exist. (To be fair, two of these are options for help, and the third — the online tribunal — is a low-cost path to bringing a legal action.)

Lawyer Referral Service
Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
Call 1-800-663-1919
Visit Website
Access Pro Bono's Free Legal Advice
Volunteer lawyers provide 30 minutes of free legal advice to people with low or modest income.
Call 1-877-762-6664
Visit Website
Civil Resolution Tribunal
Resolve disputes of less than $5,000 online 24/7 (no need for a lawyer!).
Visit website
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