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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 up to O.I.C. 2013-105 (March 28, 2013, effective June 1, 2013), N.S. Reg. 94/2013


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 of merchandise at a street or road location, where the goods and money are exchanged 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 sell goods provided by the multi-level marketing wholesaler to consumers by direct sale and is deemed to be a salesperson under this [the] Act;

 

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

 

                (d)    “multi-level marketing plan” means a plan for the supply of a product whereby a participant in the plan receives compensation for the supply of the product to another participant in the plan who, in turn, receives compensation for the supply of the same or another product supplied by the multi-level marketing wholesaler 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 the purchaser of goods or services to be used in or in respect of his business and not for resale;

 

                (b)    manufacturers or distributors of petroleum products and direct sales of any goods by or on behalf of such direct sellers while such direct sellers are subject to 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 that they 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 of the Act and Section 22 of these regulations do not apply to a direct sales contract where the consideration to be provided by the purchaser is of a value of $100.00 or less, 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 regulations do not apply to a salesperson where all of the goods and services offered for sale by the 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 a saleperson represents are sold at a cost of $100.00 or more per item, the salesperson shall 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 years immediately preceding the date of the application;

 

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

 

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

 

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

 

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

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 to subsection (6) is amalgamated with one or more other companies, a salesperson who represents the resulting amalgamated company shall be exempt from the requirement to hold a salesperson’s permit if the amalgamated company

 

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

 

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

 

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

 

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

 

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

 

                         (iii)   has demonstrated compliance with the legislative and regulatory requirements 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 seller engaged 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 exempt pursuant 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 to whom 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 by multiplying the number of salespersons included in that exemption by $5.40,

Subclause 2(7)(b)(i) amended: O.I.C. 2013-105, N.S. Reg. 94/2013.

                         (ii)    at the time a salesperson’s name is first added to the quarterly list, $5.40, and

Subclause 2(7)(b)(ii) amended: O.I.C. 2013-105, N.S. Reg. 94/2013

                         (iii)   at the time of application for renewal of the direct seller’s permit, a fee calculated by multiplying the total number of salespersons listed on the renewal application by $5.40.

Subclause 2(7)(b)(iii) amended: O.I.C. 2013-105, N.S. Reg. 94/2013

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 from the 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 the Department or to other jurisdictions where the direct seller operates or has operated;

 

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

 

                (d)    not demonstrated compliance with legislative and regulatory requirements in Nova Scotia or other jurisdictions where the direct seller operates or has operated; 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 as the Registrar may from time to time specify.

 

       (2)    An application for a permit as a salesperson or renewal thereof shall be in a form as the 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 any time after the issuance of a permit as a direct seller, the Registrar may require that a financial statement be prepared, at the applicant’s or the direct sellers’ expense, as the case may 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 time specify.

 

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

 

6     Every person who holds a permit as a direct seller shall maintain a permanent place of business 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 and who is not required to hold a salesperson’s permit with an identification card containing the following information:

 

                (a)    a preface that states as follows:

 

The bearer of this card is permitted to engage in direct sales activity regulated by 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 and phone number;

 

                (d)    the signature of the direct seller, or if the direct seller is a corporation, an officer 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 the identification 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 a permit of a direct seller or salesperson of hearing aids, or the cancellation of any such existing permit or the reinstatement of any such suspended or cancelled permit, the Registrar may in any case where he deems it proper, nominate an Advisory Board consisting of four persons: one of whom shall be the Registrar or other person appointed by him; one of whom shall be a member of the Nova Scotia Hearing Aid Society; one of whom shall be a qualified medical practitioner in Nova Scotia specializing in otorhinolaryngology; and one of whom shall be an audiologist.

 

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

 

       (3)    Every applicant for a permit as a direct seller or salesperson to fit or sell hearing aids shall complete the course or courses of study, pass the required examination or examinations and comply with other standards of competence as may from time to time 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 or salesperson to fit or sell hearing aids to complete the course or courses of study, pass the required examination or examinations and comply with the Standards of Competence as may from time to time be approved by the Registrar, whenever the Registrar 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 be considered a pass mark for an examination.

 

       (6)    An examinee who fails to obtain in an examination the pass mark set forth in subsection (5) shall be entitled to take a supplementary examination within 30 days of 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 renewal thereof shall be accompanied by a Certificate of Calibration acceptable to the Registrar 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 the six 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 a direct 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.....................................................................................$129.45

Clause 9(1)(a) amended: O.I.C. 2013-105, N.S. Reg. 94/2013.

 

                (b)    where more than 5 and up to 10 salespersons will be engaged...............$257.70

Clause 9(1)(b) amended: O.I.C. 2013-105, N.S. Reg. 94/2013.

 

                (c)    where more than 10 salespersons will be engaged.................................$387.10

Clause 9(1)(c) amended: O.I.C. 2013-105, N.S. Reg. 94/2013.

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 a salesperson’s permit is as follows:


When application made

Fee

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

$51.40

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

$36.25

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

$24.20

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

$12.10

Section 10 replaced: O.I.C. 2000-379, N.S. Reg. 133/2000; amended: O.I.C. 2013-105, N.S. Reg. 94/2013.

 

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.....................$36.25

Section 11 replaced: O.I.C. 95-845, N.S. Reg. 171/95; amended: 2013-105, N.S. Reg. 94/2013.

 

12   The direct seller is responsible for forwarding to the Registrar applications of all salespersons 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 in one 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 the following 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 amount shall be $25 000.00 for direct sellers with an average sale amount of $100.00 or less; and

 

                (b)    the maximum amount of a bond shall be $250 000.00 for direct sellers with an average 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 on the following:

 

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

 

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

 

                (c)    whether in the opinion of the Registrar the amount of the bond determined by the 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 party undertaking naming a principal, obligee and surety under which the surety agrees to indemnify the obligee against loss arising from the failure of the principal to comply with 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 pledging collateral security in a predetermined amount to the Province of Nova Scotia which may be forfeited in the event of violation by that person of any of the provisions of the Act or the regulations made pursuant thereto;

 

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

 

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

 

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

 

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

 

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

 

16   The Registrar may, before granting a salesperson’s permit, require that the applicant deliver 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 collateral security as he deems necessary.

 

18   (1)    A bond may be terminated by any person bound thereunder by giving to the Registrar and the direct seller or salesperson named in the bond at least two months notice in writing of intention to terminate and, subject to Section 19, the bond shall be deemed to be terminated on the date stated in the notice, which date shall be not less 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 the termination 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 the termination 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 case may be; or

 

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

 

every bond shall continue in force, and the collateral security, if any, shall remain on deposit for a period of three years following the termination of the permit or the termination 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 any claim against the proceeds of the bond or such part as remains in his hands within three years of the forfeiture, the Registrar may pay the proceeds of the bond or the collateral security, or any part remaining, to any person who made a payment under the bond or who deposited the collateral security, after first deducting the amount of any expenses that have been incurred in connection with any investigation or otherwise relating to the direct seller or 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 direct seller or salesperson, as the case may be, shall automatically be suspended and shall remain so suspended until the direct seller or the salesperson, as the case may be, delivers to the Registrar 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 shall contain

 

                (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 cost of 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 transaction date;

 

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

 

                (j)     where credit is extended, a statement of any security taken and the cost of borrowing 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 the following form:

 

Statement of Cancellation Rights

You may cancel this contract from the day you enter into the contract until 10 days 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 in the 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 other grounds for extended cancellation. For more information you may contact the provincial/territorial consumer affairs office.

 

If you cancel this contract, the seller has 15 days to refund your money and any trade-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 the contract. You must give notice of cancellation by a method that will allow you to prove that you gave notice, including fax, mail or personal delivery.

 

Address for Notice: [Include name, business address, phone number if this statement 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, its location 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-point bold 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 the amount of $250.00 or less and a notice of cancellation of the contract in accordance with clause 21(1)(a) of the Act has been given and all or part of the services have been 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 of damages.

 

       (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 by the direct seller.

 

       (3)    Subsections (1) and (2) do not apply to the cancellation of a contract due to a manufacturer’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 communication regarding the direct selling of goods and services, use the name under which he [or she] obtained his [or her] permit and identify his [or her] permit by the number it bears.

 

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


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


“license” replaced with “permit” throughout regulations: O.I.C. 2003-270, N.S. Reg. 122/2003.

“salesman/men” replaced with “salesperson(s)” throughout regulations: O.I.C. 95-845, N.S. Reg. 171/95.