Consumer Protection

HOME SOLICITATION SALES ACT

The home solicitation sales industry has historically employed systematic consumer abuse, fraud, deception, and high-pressure tactics. Home improvement contractors, burial plot salesmen, and some subscription salesmen use this sales technique to conduct much of their business. In order to provide some protection to consumers, a three-day cooling off period gives consumers time to reconsider the purchase decision after the hard sell is over. 

The Virginia Home Solicitation Sales Act, Va. Code 59.1-21.1 through 21.7:1, and the FTC Trade Regulation Rule concerning a Cooling Off Period for Door to Door Sales, 16 CFR 429 give the consumer the right to cancel a home solicitation transaction; require that the buyer be given certain information and forms at the time of the transaction, and provide consumer's rights for those involved in such transactions. 
The scope of the Act includes "home solicitation sales". These include all sales or leases of goods or services in which the seller or a person acting for him engages in a personal solicitation of that sale or lease, or in a solicitation of the sale or lease by telephonic or other electronic means at any residence other than that of the seller, and where the buyer offers to or purchases the goods or services. Va. Code §59.1-21.2(A). The scope of the Act is therefore very broad. For example, the Act can be invoked where the seller appears at the buyer's home in response to the buyer's telephone request. 

The Act excludes the sale or lease of farm equipment. It also excludes cash sales of less than $25, a sale pursuant to an already existing revolving charge account, or a sale or lease made pursuant to prior negotiations between the parties. Va. Code §59.1-21.2(B). 

Notice Requirements 
If the Act applies, the seller must in all cases give the buyer a fully completed written receipt in a cash or credit card sale, or obtain the buyer's signature to a written agreement or offer to purchase, if the sale is a credit sale. This receipt or written agreement must designate as the date of the transaction the date on which the buyer actually makes payments in whole or in part or signs. The receipt or written agreement must contain a statement of the buyer's rights and a notice of cancellation as prescribed by Va. Code §59.1-21.4(2). This statement must appear on the front side of the contract, or immediately above the buyer's signature, in bold face type of a minimum size of ten points under the conspicuous caption: "BUYER'S RIGHT TO CANCEL". The statement must either read as the language contained in the Va. Code at §59.1-21.4(2)(b)(i) or in the form and content of the notice required by the FTC Rule noted above. 

Until the seller has complied with the notice requirements of Va. Code §59.1-21.4, the buyer may cancel the home solicitation sale by notifying the seller in any manner and by any means of his intention to cancel. The seller must furnish the buyer with a copy of any contract pertaining to a home solicitation sale at the time of its execution. 
A home solicitation sale is deemed to comply with the notice requirements of Va. Code §59.1-21.4 if the buyer may at any time cancel the order, or refuse to accept delivery of the goods without any obligation to pay for them, or return the goods to the seller and receive a full refund for any amount paid. 

In addition, the notice requirements are deemed complied with where the buyer's right to cancel the order, refuse delivery, or return the goods, together with the name and address of the selling company or the salesperson, is clearly and conspicuously set forth on the face or reverse side of the sales receipt or contract in a size larger than that used in the body of the receipt or contract. Va. Code §59.1-21.4(4). 

Cancellation of Sales 
The main remedy provided by the Act is the consumer's right to cancel any sale or lease covered by the Act until midnight of the third business day after the day on which the buyer signs an agreement or offer to purchase which complies with Va. Code §59.1-21.4. If the notice of cancellation of the sale is given by the buyer by mail, the notice is properly given when it is deposited in a mailbox properly addressed to the seller and postage prepaid. The notice of the cancellation need not take any particular form and is sufficient if it indicates by any form of written statement the buyer's intention not to be bound by the home solicitation sale. 

The buyer cannot, however, cancel the sale after requesting the seller to provide goods or services without delay because of an emergency, and the seller makes a substantial beginning of performance in good faith before the buyer gives notice of cancellation. In the case of consumer goods, the sale cannot be canceled if the goods cannot be returned to the seller in substantially as good a condition as when received by the buyer. In such cases, the buyer's emergency request must be in a dated writing personally signed by the buyer and expressly state that he is waiving the rights given under the Act. 

Other than emergencies, any statement of waiver of the rights or responsibilities under the Act is null and void. If the seller obtains such a waiver, the buyer's right to cancel shall commence on the first business day of his learning that the waiver is invalid and ineffective. 
Some sellers attempt to avoid the cancellation requirements of the Act by having the buyer waiver the right to cancel under the guise of a bogus "emergency", such as to "take advantage of a promotion". Those waivers should be challenged as not constituting a real "emergency". 
Also, if the seller fails to immediately identify himself at the time of a home solicitation sale or should represent or infer that his purpose is anything other than selling or leasing, the buyer has thirty days to cancel, provided the goods are made available for the seller's possession and are tendered back to the seller in as good a condition as when received by the buyer. Va. Code §59.1-21.7. 

Rights After Cancellation 
If the buyer has properly canceled a home solicitation sale, the Act provides that within ten days after the cancellation the seller must tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness. If the down payment includes a trade-in, the traded-in goods must be tendered in substantially as good a condition as when received by the seller. If the seller fails to tender, the buyer may elect to recover an amount equal to the trade-in allowance stated in the agreement. Va. Code §59.1-21.5. 

Until the seller complies with the above, the buyer may retain possession of any goods delivered to him by the seller and has a lien on the goods in his possession or control for any recovery to which he is entitled. 
If the seller has complied with the tender requirements set out above, the buyer must then upon demand tender to the seller any goods delivered pursuant to the sale. Va. Code §59.1-21.6. However, the buyer is not obligated to tender at any place other than his residence. If the seller fails to demand possession of the goods within twenty days after cancellation of the sale, the goods become the property of the buyer without any obligation to pay for them. 

The buyer has the duty to take reasonable care of the goods in his possession before the cancellation of the sale and for a reasonable time thereafter, during which time the goods are otherwise at the seller's risk. 
A seller who has performed services prior to a proper cancellation of the sale is not entitled to any compensation for that work done. 

Remedies 
A violation of the home Solicitation Sales Act is a prohibited practice under the Virginia Consumer Protection Act. Va. Code §59.1-21.7:1. 
Depending upon the facts, other claims or defenses may exist, of course, such as common law fraud, breach of warranties, the Truth in Lending Act, or other defenses. 

This information has been provided by Jay Speer, Virginia Poverty Law Center.

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