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

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{{Dial-A-Law Blurb}}
{{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==
We hope the businesses we deal with have our best interests in mind. Unfortunately, that’s not always the case. Learn about the laws protecting you from dishonest business practices and schemes.


==Understand your legal rights==
===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.


===BC law protects consumers against dishonest business practices===
===The seller must not mislead you===
BC’s ''[http://canlii.ca/t/84mr Business Practices and Consumer Protection Act]'' protects consumers against dishonest or misleading business practices. 
Sellers can’t mislead you to convince you to buy something. What’s misleading?


====This law applies to transactions between “consumers” and “suppliers”====
* If they offer you a special “30% discount” but, really, everyone can get that special price.
A '''consumer''' is a person who buys or leases something for personal, family or household purposes.  
* 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.


A “'''supplier'''” is a person who in the course of business participates in a consumer transaction. Participating includes advertising or promoting a consumer transaction. This definition covers businesses from your local retailer to the national big box store, but not your neighbour who has a garage sale once a year.  
This is when a seller advertises something at a bargain. But guess what, it isn’t in stock.


This law applies to sales, transactions or advertisements involving goods, real estate, services or credit, but it doesn’t cover securities or insurance.
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.


====“Deceptive acts or practices” are prohibited====
They can’t do that. Such unfair practices are against the law.
Under [https://www.canlii.org/en/bc/laws/stat/sbc-2004-c-2/latest/sbc-2004-c-2.html#sec5_smooth BC law], a supplier must not engage in a “'''deceptive act or practice'''”. This includes any oral or written statements, visual or descriptive representations, or conduct by a supplier that can deceive or mislead a consumer.  


For example, it’s deceptive for someone selling roofing products to say your house needs a new roof when it doesn’t. It’s deceptive for a car dealership to tell you a car you’re interested in was previously owned by a senior citizen when, in fact, it used to be a taxi.
===The seller must not act unfairly towards you===
Sellers can’t act unfairly. What’s unfair?


====“Unconscionable acts or practices” are prohibited====
* They charge you a price that’s far higher than what other sellers are asking for the same thing.
“'''Unconscionable acts or practices'''” are also prohibited. Unconscionable includes unscrupulous or dishonest practices such as high-pressure sales tactics. For example, 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?
* 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.


===If a business does something deceptive or unconscionable===
Sellers can’t take advantage of any physical or mental disability, illiteracy or language difficulties.
If a business does something deceptive or unconscionable, you have options.


====Complaining to Consumer Protection BC====
For example, a seller can’t force people whose first language is Mandarin to sign a complicated contract in English.
You can complain to [https://www.consumerprotectionbc.ca/ Consumer Protection BC]. They investigate situations where a supplier may have done something deceptive or knowingly took advantage of you. They can issue a “'''compliance order'''” forcing a supplier to comply with the law and possibly reimburse any money that consumers have lost.  


In extreme (and rare) cases involving many consumers who have lost a lot of money, Consumer Protection BC can freeze the supplier’s bank account and sue the supplier. In serious cases, the supplier can also be charged with an offence under the law and fined.
If the seller does something unfair, then the agreement isn’t binding. That means you can return what you bought for a refund.


====Suing the supplier====
===You’re protected by the legal warranty===
You can bring a legal action against the supplier. You can use Small Claims Court if your claim is for less than $35,000. If your claim is for less than $5,000, you can bring your claim to the [https://civilresolutionbc.ca/ Civil Resolution Tribunal].
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:


If your action goes to trial and you win, the court can order compensation for your financial loss. The court can also award “'''punitive damages'''”, which are designed to punish the supplier.
* 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


===Federal law prohibits false or misleading advertising===
These conditions are sometimes referred to as '''the legal warranty'''.
There are also [http://canlii.ca/t/7vdv federal laws] that prohibit sellers from advertising or saying anything that is false or misleading.  


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 try to get you to buy a different, more expensive item.  
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.


Also, if there’s more than one price tag on an item, the store must charge you the lowest price, unless the lower price has been crossed out or covered up.
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.


===Deceptive telemarketing is prohibited===
===Do your homework on any extended warranty===
Some companies use deceptive practices when trying to sell you something over the phone. They call saying 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://canlii.ca/t/7vdv Competition Act]'' and is a criminal offence.
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.


====Telemarketers must follow certain rules====
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!
BC’s [http://canlii.ca/t/85zc Telemarketer Licensing Regulation] applies to telemarketers operating in BC who contact consumers to buy something over the phone. This regulation also applies to third-party fundraisers. The 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 am and 9:30 pm and weekends between 10 am and 6 pm, and they can’t communicate with you on statutory holidays.


====If you’re getting fed up with telemarketers====
If you're thinking about an extended warranty, check its terms:
If you get an unsolicited phone call to buy something, don’t give out information about your bank account 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, register your phone number with the [https://www.lnnte-dncl.gc.ca/index-eng National Do Not Call List].


===Federal law protects against spam and online threats===
* How long is it good for?
Canada has [http://canlii.ca/t/8p22 a law] that aims to protect people from '''spam''' (junk email and text messages) and online threats (spyware, malware, phishing scams, and so on). Unfortunately, the law cannot control businesses and people outside Canada, and they produce huge amounts of spam and online threats.
* 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!


====Consent is required====
==Take action==
A key section of Canada’s anti-spam 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.
Think you’re ready to buy? Wait a tick. Here are a few practical tips to keep in mind.


====There are two types of consent====
===Step 1. Do your research===
There is '''implied consent''' if there is already a relationship between the sender and recipient of a commercial message. It lasts for two 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.  
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.


Senders of commercial messages must keep records to show they obtained the recipient’s consent. The Canadian government’s anti-spam website further [http://www.crtc.gc.ca/eng/internet/infograph.htm explains implied and express consent].
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.
====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.  


Three federal government agencies enforce the anti-spam 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].
Read reviews from trustworthy sources. Consumer Reports is an independent, non-profit source of product reviews. [https://www.consumerreports.org/ See their website].


For more information on the law, see the Canadian government’s anti-spam website, [http://fightspam.gc.ca/eic/site/030.nsf/eng/home fightspam.gc.ca].
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].


==Common questions==
===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.


===Are pyramid schemes legal?===
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.
No. With a '''pyramid scheme''', you’re typically promised that by participating, you can make money by recruiting other people to participate. If those new participants recruit others, everyone up the pyramid will get a share of the new recruitment fees. In other words, pyramid schemes make money by recruiting people rather than by selling a legitimate product or providing a service. In Canada, it’s a crime to promote a pyramid scheme or even to participate in one.


====By contrast, multi-level marketing is legal====
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.
Pyramid schemes can look a lot like "'''multi-level marketing'''", which '''is''' legal in Canada. Under "multi-level marketing", people sell consumer goods — such as cosmetics, jewelry or cleaning products — usually in customers' homes. The products are supplied by a multi-level marketing company. While a pyramid scheme focuses on recruiting more people, multi-level marketing focuses on selling products or services.  


Promoters asking you to get involved in a multi-level marketing scheme are not allowed to make exaggerated claims. 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.
===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 you’re a victim of a pyramid scheme====
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.
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 five years in jail, or both.


===How can I protect against dishonest franchises?===
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].
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 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.
===Step 4. Read and understand any contract===
Read the fine print on any contract before you sign.


{| class="wikitable"
* Go over every section of the document, including any text on the reverse side of printed pages.
|align="left"|'''Tip'''
* Ask the other party to explain what something means if you don’t understand it.
A well-researched franchise may be an effective business. But if you are considering buying a franchise, it’s wise to have a properly prepared franchise agreement. A lawyer can help with that.
* 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.
|}
===How can I protect against other types of scams?===
'''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.  


'''Chain letters''' inviting you to send and receive money are illegal under the ''Criminal Code''.
===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.


Watch out for scams involving the sale of office supplies, listings in directories, and phony invoices. In the '''office supply scam''', for example, a business gets an unsolicited call implying the business previously agreed to accept shipment of paper and office supplies, when in fact the business hadn’t ordered the supplies. When the supplies arrive, they cost way more than the going rate and are inferior.
==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.


==Get help==
:'''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]


===Agencies that can help===
:'''Better Business Bureau'''
'''Consumer Protection BC''' provides assistance relating to certain types of consumer problems and contracts in BC.  
:Receives complaints about local businesses that are members.
:Toll-free: 1-888-564-9963
:Call 1-888-803-1222
:Web: [http://www.consumerprotectionbc.ca/ consumerprotectionbc.ca]
:[https://www.bbb.org/ca/bc Visit website]


The '''Better Business Bureau''' assists people in finding businesses they can trust.
:'''Competition Bureau'''
:Telephone: 604-682-2711 for Mainland BC and 250-386-6348 for Vancouver Island
:Deals with complaints about false or misleading advertising.
:Web: [http://www.bbb.org/ca/bc bbb.org/ca/bc]
:Call 1-800-348-5358
:[https://www.competitionbureau.gc.ca/ Visit website]


For inquiries on the ''Competition Act'', call the '''Competition Bureau'''.
===Legal advice===
:Toll-free: 1-800-348-5358
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.)
:Web: [http://www.competitionbureau.gc.ca competitionbureau.gc.ca]


For inquiries relating specifically to dishonest selling practices with vehicles, contact the '''Vehicle Sales Authority of BC'''. They have information on consumer complaints and on advertising rules for motor vehicle dealers.
:'''Lawyer Referral Service'''
:Toll-free: 1-877-294-9889
:Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
:Web: [http://www.mvsabc.com/ mvsabc.com]
: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]


[updated June 2017]
:'''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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