Anonymous

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

From Clicklaw Wikibooks
no edit summary
Line 2: Line 2:


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


==Consumers are protected against dishonest business practices==
==Understand your legal rights==
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:
#deceptive acts and practices
#unconscionable acts and practices


==The Act applies to transactions and sales between “consumers” and “suppliers”==
===BC law protects consumers against dishonest business practices===
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.
BC’s ''[http://canlii.ca/t/84mr Business Practices and Consumer Protection Act]'' protects consumers against dishonest or misleading business practices.


==Deceptive acts and practices==
====This law applies to transactions between “consumers” and “suppliers”====
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.
A '''consumer''' is a person who buys or leases something for personal, family or household purposes.  


==Unconscionable acts and practices==
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.
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==
This law applies to sales, transactions or advertisements involving goods, real estate, services or credit, but it doesn’t cover securities or insurance.
[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==
====“Deceptive acts or practices” are prohibited====
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].
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.  


==The federal ''Competition Act'' also prohibits misleading price advertising==
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.
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.


==Deceptive telemarketing==
====“Unconscionable acts or practices” are prohibited====
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.
“'''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?


==Telemarketers must follow rules==  
===If a business does something deceptive or unconscionable===
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.
If a business does something deceptive or unconscionable, you have options.


==Dealing with telemarketers==
====Complaining to Consumer Protection BC====
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.
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.  


==Canada’s new anti-spam law starts July 1, 2014==
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.
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.
====Suing the supplier====
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].


'''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].  
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.  


'''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.  
===Federal law prohibits false or misleading advertising===
There are also [http://canlii.ca/t/7vdv federal laws] that prohibit sellers from advertising or saying anything that is false or misleading.  


[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].  
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.  


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].
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.


==Business schemes to be wary of==
===Deceptive telemarketing is prohibited===
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.
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.


==A pyramid scheme is an illegal type of multi-level marketing==
====Telemarketers must follow certain rules====
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!
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 a victim of an unlawful multi-level marketing scheme==
====If you’re getting fed up with telemarketers====
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.
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].


==Franchises==
===Federal law protects against spam and online threats===
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.
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.  


==Work-at-home schemes and chain letters==
====Consent is required====
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''.
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.


==Other scams==
====There are two types of consent====
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.
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.  


==Before investing money in any business, investigate carefully==
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].
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.
====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.  


==Where can you get help or more information?==
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].
*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].
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 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. 
==Common questions==
*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”.
===Are pyramid schemes legal?===
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====
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.
 
====If you’re a victim of a pyramid scheme====
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?===
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.
 
{| class="wikitable"
|align="left"|'''Tip'''
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.
|}
===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''.
 
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.
 
==Get help==
 
===Agencies that can help===
'''Consumer Protection BC''' provides assistance relating to certain types of consumer problems and contracts in BC.
:Toll-free: 1-888-564-9963
:Web: [http://www.consumerprotectionbc.ca/ consumerprotectionbc.ca]
 
The '''Better Business Bureau''' assists people in finding businesses they can trust.
:Telephone: 604-682-2711 for Mainland BC and 250-386-6348 for Vancouver Island
:Web: [http://www.bbb.org/ca/bc bbb.org/ca/bc]
 
For inquiries on the ''Competition Act'', call the '''Competition Bureau'''.
:Toll-free: 1-800-348-5358
: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.
:Toll-free: 1-877-294-9889
:Web: [http://www.mvsabc.com/ mvsabc.com]




[updated June 2017]
[updated June 2017]


----
----
----
----


{{Dial-A-Law Copyright}}
{{Dial-A-Law Copyright}}


{{Dial-A-Law_Navbox|type=credit}}
{{Dial-A-Law_Navbox|type=credit}}
3,009

edits