Direct Sellers Regulations

Link to law: https://www.novascotia.ca/just/regulations/regs/dsregs.htm

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now
Direct Sellers Regulations
made under Section 35 of the

Direct Sellers’ Regulation Act

R.S.N.S. 1989, c. 129

O.I.C. 76-1186 (October 12, 1976), N.S. Reg. 93/76

as amended to O.I.C. 2015-96 (March 31, 2015, effective June 1, 2015), N.S. Reg. 93/2015

Citation

1     These regulations may be cited as the Direct Sellers Regulations.

Section 1 added: O.I.C. 2003-270, N.S. Reg. 122/2003.

Definitions

1A  (1)    In these regulations, “Act” means the Direct Sellers’ Regulation Act.

[Note: title of Act changed by the Business Efficiency Act (1998), S.N.S. 1998, c. 8.]

 

       (2)    For the purposes of the Act and these regulations

 

                (a)    “hawker” means a person who holds a municipal permit authorizing the sale ofmerchandise at a street or road location, where the goods and money areexchanged at the time of the sale;

 

                (b)    “multi-level marketing distributor” means a person who enters into a multi-level marketing plan agreement with a multi-level marketing wholesaler to sellgoods provided by the multi-level marketing wholesaler to consumers by directsale and is deemed to be a salesperson under this [the] Act;

 

                (c)    “multi-level marketing wholesaler” means a person who provides goods to amulti-level marketing distributor under the terms of a multi-level marketingplan for direct sale to consumers;

 

                (d)    “multi-level marketing plan” means a plan for the supply of a product wherebya participant in the plan receives compensation for the supply of the product toanother participant in the plan who, in turn, receives compensation for thesupply of the same or another product supplied by the multi-level marketingwholesaler to other participants in the plan.

Subsection 1(2) replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

Section 1 renumbered 1A: O.I.C. 2003-270, N.S. Reg. 122/2003.

Exemptions

2     (1)    The Act does not apply to

 

                (a)    a direct sales contract under which a person engaged in business for gain is thepurchaser of goods or services to be used in or in respect of his business andnot for resale;

 

                (b)    manufacturers or distributors of petroleum products and direct sales of anygoods by or on behalf of such direct sellers while such direct sellers are subjectto the provisions of the Gasoline and Fuel Oil Licensing Act, R.S.N.S. 1989,c. 184, as amended;

 

                (c)    a student selling goods on behalf of or under the auspices of the school thatthey attend and for which they receive no direct compensation; or

Clause 2(1)(c) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

                (d)    a hawker.

Clause 2(1)(d) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (2)    Subsections 20(1), (2) and (3), clause 21(1)(a), subsection 24(1) and Section 25 ofthe Act and Section 22 of these regulations do not apply to a direct sales contractwhere the consideration to be provided by the purchaser is of a value of $100.00 orless, save and except for a direct sales contract respecting hearing aids.

Subsection 2(2) replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (3)    The permit requirements for a salesperson contained in the Act and these regulationsdo not apply to a salesperson where all of the goods and services offered for sale bythe direct seller whom the salesperson represents are sold at a cost of less than$100.00 per item.

Subsection 2(3) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (4)    Where any of the goods and services offered for sale by the direct seller whom asaleperson represents are sold at a cost of $100.00 or more per item, the salespersonshall be exempt from the requirement to hold a permit under Section 5 of the Act,where the direct seller whom the salesperson represents

 

                (a)    has held a permit in Nova Scotia for a period of 5 consecutive yearsimmediately preceding the date of the application;

 

                (b)    has not been the subject of significant consumer complaints addressed to theDepartment or to other jurisdictions where the direct seller operates or hasoperated;

 

                (c)    has not engaged in direct selling without a permit in Nova Scotia or elsewhere;

 

                (d)    has demonstrated compliance with legislative and regulatory requirements inNova Scotia and other jurisdictions; and

 

                (e)    submits a written application for an exemption on behalf of the salesperson tothe Registrar at least 60 days prior to the expiry date of the direct seller’spermit.

Subsection 2(4) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (4A) Where a direct seller that holds an exemption permit for its salespersons pursuant tosubsection (6) is amalgamated with one or more other companies, a salesperson whorepresents the resulting amalgamated company shall be exempt from the requirementto hold a salesperson’s permit if the amalgamated company

 

                (a)    submits a written application for an exemption on behalf of the salesperson tothe Registrar together with its application for a permit as a direct seller, orwithin 30 days of the coming into force of this subsection;

 

                (b)    provides written assurance, to the satisfaction of the Registrar, that its methodof operation, including its sales techniques, contracts, complaint handling andcancellation provisions, will not differ from the method of operation of theamalgamating direct seller that held the exemption permit prior to theamalgamation;

 

                (c)    provides written assurance, to the satisfaction of the Registrar, that each of theamalgamating companies

 

                         (i)     has not been the subject of significant consumer complaints addressed tothe Department or to other jurisdictions where it operated,

 

                         (ii)    has not engaged in direct selling without a permit in Nova Scotia orelsewhere, and

 

                         (iii)   has demonstrated compliance with the legislative and regulatoryrequirements in Nova Scotia and other jurisdictions where it operated;and

 

                (d)    is granted a permit as a direct seller pursuant to the Act.

Subsection 2(4A) added: O.I.C. 2003-270, N.S. Reg. 122/2003.

 

       (5)    Subsections (3), (4) and (4A) do not apply to a direct salesperson or direct sellerengaged in the sale of hearing aids.

Subsection 2(5) added: O.I.C. 2000-379, N.S. Reg. 133/2000; amended: O.I.C. 2003-270, N.S. Reg. 122/2003.

 

       (6)    The Registrar may issue an exemption permit for a salesperson who is exemptpursuant to subsection (4) or (4A).

Subsection 2(6) added: O.I.C. 2000-379, N.S. Reg. 133/2000; amended: O.I.C. 2003-270, N.S. Reg. 122/2003.

 

       (7)    A direct seller who has been issued an exemption permit pursuant to subsection (6)for any of the salespersons who represent the direct seller shall

 

                (a)    file with the Registrar quarterly a list of the names of exempt salespersons towhom identification cards have been issued; and

 

                (b)    submit the following fees to the Registrar:

 

                         (i)     at the time the initial exemption is granted, a fee calculated bymultiplying the number of salespersons included in that exemption by$5.55,

Subclause 2(7)(b)(i) amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

                         (ii)    at the time a salesperson’s name is first added to the quarterly list, $5.55,and

Subclause 2(7)(b)(ii) amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

                         (iii)   at the time of application for renewal of the direct seller’s permit, a feecalculated by multiplying the total number of salespersons listed on therenewal application by $5.55.

Subclause 2(7)(b)(iii) amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

Subsection 2(7) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (8)    If the Registrar is satisfied that a direct seller whose salespersons are exempt fromthe requirement to hold a permit pursuant to subsection (4) or (4A) has

 

                (a)    done one of the things listed in clauses 18(2)(a) through (d) of the Act;

 

                (b)    been the subject of significant consumer complaints addressed to theDepartment or to other jurisdictions where the direct seller operates or hasoperated;

 

                (c)    engaged in direct selling without a permit in Nova Scotia or elsewhere;

 

                (d)    not demonstrated compliance with legislative and regulatory requirements inNova Scotia or other jurisdictions where the direct seller operates or hasoperated; or

 

                (e)    failed to comply with subsection (7),

 

the Registrar may revoke the exemption.

Subsection 2(8) added: O.I.C. 2003-270, N.S. Reg. 122/2003.

Permits

3     (1)    An application for a permit as a direct seller or renewal thereof shall be in a form asthe Registrar may from time to time specify.

 

       (2)    An application for a permit as a salesperson or renewal thereof shall be in a form asthe Registrar may from time to time specify.

 

4     At the time of an application for a permit as a direct seller or renewal thereof, or at anytime after the issuance of a permit as a direct seller, the Registrar may require that afinancial statement be prepared, at the applicant’s or the direct sellers’ expense, as the casemay be, by an accountant approved by the Registrar.

 

5     (1)    A direct seller’s permit shall be in a form as the Registrar may from time to timespecify.

 

       (2)    A salesperson’s permit shall be in a form as the Registrar may from time to timespecify.

 

6     Every person who holds a permit as a direct seller shall maintain a permanent place ofbusiness in Nova Scotia.

Section 6 amended: O.I.C. 2003-270, N.S. Reg. 122/2003.

Identification cards

7     (1)    A direct seller shall provide each salesperson who represents the direct seller andwho is not required to hold a salesperson’s permit with an identification cardcontaining the following information:

 

                (a)    a preface that states as follows:

 

The bearer of this card is permitted to engage in direct sales activity regulatedby the Nova Scotia Direct Sellers’ Regulation Act on behalf of_________________________ .

name of direct seller

 

                (b)    the name and address of the salesperson;

 

                (c)    the direct seller’s address, business permit number issued under the Act andphone number;

 

                (d)    the signature of the direct seller, or if the direct seller is a corporation, anofficer authorized to sign on behalf of the corporation;

 

                (e)    the issue date of the card and the expiry date of the direct seller’s permit.

 

       (2)    When a salesperson ceases to represent a direct seller, the salesperson shall return theidentification card to the direct seller.

Section 7 replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

Special requirements - direct seller or salesperson of hearing aids

8     (1)    In determining the granting or refusal of an application for a permit or renewal of apermit of a direct seller or salesperson of hearing aids, or the cancellation of any suchexisting permit or the reinstatement of any such suspended or cancelled permit, theRegistrar may in any case where he deems it proper, nominate an Advisory Boardconsisting of four persons: one of whom shall be the Registrar or other personappointed by him; one of whom shall be a member of the Nova Scotia Hearing AidSociety; one of whom shall be a qualified medical practitioner in Nova Scotiaspecializing in otorhinolaryngology; and one of whom shall be an audiologist.

 

       (2)    After the Advisory Board referred to in subsection (1) considers any mattersubmitted to it by the Registrar, the Board shall make a recommendation to theRegistrar in writing, and the Registrar shall take such recommendation intoconsideration when making his decision.

 

       (3)    Every applicant for a permit as a direct seller or salesperson to fit or sell hearing aidsshall complete the course or courses of study, pass the required examination orexaminations and comply with other standards of competence as may from time totime be approved by the Registrar.

Subsection 8(3) amended: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (4)    The Registrar may require any applicant for renewal of a permit as a direct seller orsalesperson to fit or sell hearing aids to complete the course or courses of study, passthe required examination or examinations and comply with the Standards ofCompetence as may from time to time be approved by the Registrar, whenever theRegistrar deems it necessary.

Subsection 8(4) amended: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (5)    For the purposes of subsection (3) and (4) a score of 70% or better shall beconsidered a pass mark for an examination.

 

       (6)    An examinee who fails to obtain in an examination the pass mark set forth insubsection (5) shall be entitled to take a supplementary examination within 30 daysof being informed of his score on the examination.

 

       (7)    Every application for a permit as a direct seller to fit or sell hearing aids or renewalthereof shall be accompanied by a Certificate of Calibration acceptable to theRegistrar of the audiometer or audiometers used in the direct seller’s business.

Subsection 8(7) amended: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (8)    The Certificate of Calibration referred to in subsection (7) shall be issued within thesix months immediately prior to the date of the application or renewal thereof.

Fees

9     (1)    The fee payable to the Registrar upon application for the granting or renewal of adirect seller’s permit for 1 year or part thereof is

 

                (a)    where there are no salespersons or where up to 5 salespersons

will be engaged.....................................................................................$133.35

Clause 9(1)(a) amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

 

                (b)    where more than 5 and up to 10 salespersons will be engaged...............$265.45

Clause 9(1)(b) amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

 

                (c)    where more than 10 salespersons will be engaged.................................$398.70

Clause 9(1)(c) amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

Subsection 9(1) replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

Subsection 9(2) repealed: O.I.C. 2007-610, N.S. Reg. 447/2007.

Section 9 replaced: O.I.C. 95-845, N.S. Reg. 171/95.

 

10   The fee payable to the Registrar upon application for the granting or renewal of asalesperson’s permit is as follows:

When application made

Fee

within the 1st quarter (the first 3 months) from the date of issue of directseller’s permit

$52.95

within the 2nd quarter (months 4 to 6) from the date of issue of directseller’s permit

$37.35

within the 3rd quarter (months 7 to 9) from the date of issue of directseller’s permit

$24.95

within the 4th quarter (months 10 to 12) from the date of issue of directseller’s permit

$12.45

Section 10 replaced: O.I.C. 2000-379, N.S. Reg. 133/2000; amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

 

11   The fee payable to the Registrar for each duplicate permit when the

original is lost, stolen or destroyed, and an affidavit is made thereto, is.....................$37.35

Section 11 replaced: O.I.C. 95-845, N.S. Reg. 171/95; amended: O.I.C. 2015-96, N.S. Reg. 93/2015.

 

12   The direct seller is responsible for forwarding to the Registrar applications of allsalespersons and all fees.

Section 12 amended: O.I.C. 2000-279, N.S. Reg. 133/2000.

Bonds

13   (1)    Every application for a permit as a direct seller shall be accompanied by a bond inone of the following forms:

 

                (a)    surety bond;

 

                (b)    personal bond;

 

                (c)    bond of a guarantor;

 

                (d)    letter of credit;

 

or any such other form as the Registrar may from time to time specify.

Subsection 13(1) amended: O.I.C. 2003-270, N.S. Reg. 122/2003.

 

       (2)    The amount of the bond required under subsection (1) shall be calculated in thefollowing manner:

 

For 1st year under permit: A x B x C = bond amount

For renewal of permits: A x B x D= bond amount

Where:

                A =  average sale amount

                B =  average number of sales per salesperson in a 30-day period

                C =  the number of salespersons anticipated to represent the direct seller in the 1st

year under permit

                D =  actual number of salespersons listed on the renewal application

Subsection 13(2) replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (3)    Despite subsection (2),

 

                (a)    the minimum amount of the bond shall be $2500.00 and the maximum amountshall be $25 000.00 for direct sellers with an average sale amount of $100.00or less; and

 

                (b)    the maximum amount of a bond shall be $250 000.00 for direct sellers with anaverage sale amount exceeding $100.00.

Subsection 13(3) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (4)    The Registrar may increase or decrease the amount of the bond at any time based onthe following:

 

                (a)    past compliance with the requirements of the Act and regulations by the directseller or the principals of the direct seller;

 

                (b)    the length of time the direct seller has been operating under a permit in NovaScotia;

 

                (c)    whether in the opinion of the Registrar the amount of the bond determined bythe formula is inappropriate due to

 

                         (i)     the high price of the items being sold;

 

                         (ii)    the high numbers of salespersons; or

 

                         (iii)   the volume of sales.

Subsection 13(4) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

14   For the purposes of these regulations

 

       (1)    a surety bond means the bond of a guarantee company and is a three partyundertaking naming a principal, obligee and surety under which the surety agrees toindemnify the obligee against loss arising from the failure of the principal to complywith the provisions of the Act or the regulations made pursuant thereto;

 

       (2)    a personal bond is an instrument by which a person binds himself by pledgingcollateral security in a predetermined amount to the Province of Nova Scotia whichmay be forfeited in the event of violation by that person of any of the provisions ofthe Act or the regulations made pursuant thereto;

 

       (3)    a bond of a guarantor is an instrument whereby a principal (person seeking bondcoverage) and a guarantor (another person) jointly pledge collateral security of apredetermined amount to the Province of Nova Scotia which may be forfeited in theevent of any violation by the principal of the provisions of the Act or the regulationsmade pursuant thereto;

 

       (4)    a letter of credit is a written guarantee whereby a chartered bank, credit union, trustcompany or financial institution as may be approved by the Registrar, guarantees thefinancial liability of the person named up to a predetermined maximum amount infavour of the Province of Nova Scotia, which amount is subject to being forfeited inthe event the person named violates any provisions of the Act or the regulationsmade pursuant thereto;

 

       (5)    “collateral security” means negotiable securities such as Stocks, Bonds andDebentures that have a market value and can be sold providing they are properlyendorsed and are in bearer form.

 

15   (1)    A personal bond and a bond of a guarantor shall in all instances be accompanied bycollateral security acceptable to the Registrar in an amount as prescribed bysubsection (2) of Section 13.

 

       (2)    The collateral security referred to in subsection (1) shall be deposited with the Minister ofFinance and Treasury Board and maintained at a market value of not less than thatprescribed by subsection (2) of Section 13.

[Note: The reference to the Minister of Finance has been updated in accordance with Order in Council 2013-348 under the Public Service Act, R.S.N.S. 1989, c. 376, effective October 22, 2013.]

 

16   The Registrar may, before granting a salesperson’s permit, require that the applicantdeliver such bond and collateral security as the Registrar deems necessary.

 

17   The Registrar may at any time require to be delivered such other bond or collateralsecurity as he deems necessary.

 

18   (1)    A bond may be terminated by any person bound thereunder by giving to theRegistrar and the direct seller or salesperson named in the bond at least two monthsnotice in writing of intention to terminate and, subject to Section 19, the bond shallbe deemed to be terminated on the date stated in the notice, which date shall be notless than two months after the receipt of the notice by the Registrar.

Section 18 renumbered subsection 18(1): O.I.C. 2000-379, N.S. Reg. 133/2000.

 

       (2)    Subject to Section 19, where

 

                (a)    a direct seller’s permit has been terminated for 1 year; and

 

                (b)    the Registrar has not received notice pursuant to subsection (1) of thetermination of the bond in which the direct seller or salesperson is named,

 

the bond shall be deemed to be terminated as of the date of the 1st anniversary of thetermination of the direct seller’s permit.

Subsection 18(2) added: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

19   For the purpose of every act or omission occurring

 

                (a)    during the duration of the direct seller’s or salesperson’s permit, as the casemay be; or

 

                (b)    during the period prior to termination of the bond under Section 18 where therehas been no termination of the permit;

 

every bond shall continue in force, and the collateral security, if any, shall remain ondeposit for a period of three years following the termination of the permit or thetermination of the bond, as the case may be.

 

20   Where a bond has been forfeited and the Registrar has not received notice in writing of anyclaim against the proceeds of the bond or such part as remains in his hands within threeyears of the forfeiture, the Registrar may pay the proceeds of the bond or the collateralsecurity, or any part remaining, to any person who made a payment under the bond or whodeposited the collateral security, after first deducting the amount of any expenses that havebeen incurred in connection with any investigation or otherwise relating to the direct selleror salesperson in respect of whose conduct the bond was conditioned.

Suspension

21   Where a bond delivered under these regulations is terminated, the permit of the directseller or salesperson, as the case may be, shall automatically be suspended and shall remainso suspended until the direct seller or the salesperson, as the case may be, delivers to theRegistrar a new bond in the amount and form required by the Registrar.

 

22   (1)    Subject to subsection 2(2), every direct sales contract shall be in writing and shallcontain

 

                (a)    the name and address of the purchaser;

 

                (b)    the direct seller’s name, business address and telephone number;

 

                (c)    the salesperson’s name and signature;

 

                (d)    the date and place of the contract;

 

                (e)    an itemized price of the goods or services, terms of payment and the total costof the contract;

 

                (f)    a description of the goods and services sufficient to identify them;

 

                (g)    a statement of the cancellation rights as provided in subsection (2);

 

                (h)    the delivery date of the goods or services if not provided on the transactiondate;

 

                (i)     the completion date for providing the services if applicable;

 

                (j)     where credit is extended, a statement of any security taken and the cost ofborrowing as required by the Consumer Protection Act;

 

                (k)    a description of any goods taken in trade and the value given to the goods;

 

                (l)     the signature of the purchaser.

 

       (2)    The statement of cancellation rights referred to in clause (1)(g) shall be in thefollowing form:

 

Statement of Cancellation Rights

You may cancel this contract from the day you enter into the contract until 10days after you receive a copy of the contract or statement of cancellation rights. You do not need a reason to cancel.

 

If you do not receive the goods or services within 30 days of the date stated inthe contract, you may cancel this contract within one year of the contract date.You lose that right if you accept delivery after the 30 days. There are othergrounds for extended cancellation. For more information you may contact theprovincial/territorial consumer affairs office.

 

If you cancel this contract, the seller has 15 days to refund your money and anytrade-in or the cash value of the trade-in. You must then return the goods.

 

To cancel, you must give notice of cancellation to the address below or in thecontract. You must give notice of cancellation by a method that will allow youto prove that you gave notice, including fax, mail or personal delivery.

 

Address for Notice: [Include name, business address, phone number if thisstatement of cancellation rights is a document separate from the contract.]

 

       (3)    Where the statement of cancellation rights is not on the face of the contract, itslocation shall be clearly indicated on the face of the contract.

 

       (4)    The heading of the statement of cancellation rights shall be in not less than 12-pointbold type and the remainder of the information in not less than 10-point type.

Section 22 replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

 

23   (1)    Where a purchaser and a direct seller have entered into a direct sales contract in theamount of $250.00 or less and a notice of cancellation of the contract in accordancewith clause 21(1)(a) of the Act has been given and all or part of the services havebeen delivered or all or part of the goods have been consumed, damaged or altered,the direct seller shall have the right to retain 25% of the purchase price in lieu ofdamages.

 

       (2)    A direct seller may apply to the courts for compensation if

 

                (a)    an amount greater than 25% is requested; or

 

                (b)    the original contract price exceeded $250.00 and compensation is requested bythe direct seller.

 

       (3)    Subsections (1) and (2) do not apply to the cancellation of a contract due to amanufacturer’s defect.

Section 23 replaced: O.I.C. 2000-379, N.S. Reg. 133/2000.

Identification

24   (1)    Every direct seller and salesperson shall, in all verbal or written communicationregarding the direct selling of goods and services, use the name under which he [orshe] obtained his [or her] permit and identify his [or her] permit by the number itbears.

 

       (2)    A salesperson shall, in addition, give the name of the direct seller by whom he [orshe] is engaged.

Section 25 repealed: O.I.C. 2000-379, N.S. Reg. 133/2000.