Customers who bought water systems after 'aggressive' sales pitch must still honour contracts
Shaina Luck | CBC News | Posted: July 25, 2024 9:00 AM | Last Updated: July 25
N.S. says Atlantic Environmental Systems used 'high-pressure' tactics, company plans to appeal
While he's watching TV in the next room, Bob Dobson can sometimes hear the new water filtration system by his kitchen sink trickling for hours.
It's a sound he finds irritating, and an uncomfortable reminder of the nearly $8,000 contract he signed last November with Atlantic Environmental Systems, a Dartmouth, N.S.-based water purification company.
He deeply regrets entering the contract which he says he signed after a sales presentation at his home in Halifax that lasted roughly three hours and involved water tests, making tea, and discussions about the type of soap he was using.
"The pressure, I guess, that I felt when [the sales representative] was doing all these tests," he told CBC News in a recent interview.
"It was driving me crazy."
On July 18, the Nova Scotia government cancelled the direct sellers permit for Atlantic Environmental Systems, preventing it from doing in-home sales presentations in the future.
But according to the province, customers like Dobson who've already bought water systems from the company must honour their sales agreements and pay for the equipment even if they don't want it.
In a written decision provided to CBC News, the provincial registrar of the act governing direct sales said she revoked the permit after receiving nine complaints from consumers about "aggressive" sales tactics that "pressured consumers to immediately sign sales agreements."
The company's lawyer, Eugene Tan, said the company plans to appeal the decision "immediately."
Water test offered by phone
In November 2023, Dobson said he received an unsolicited phone call from Atlantic Environmental Systems offering him a free water test.
He's had no health concerns about the water in the 52 years he's lived in his home, but Dobson said he agreed to the test because his well has hard water.
By the end of the presentation, Dobson's impression was that the cost of the water system would be about $80 a month. He became flustered and didn't ask how long the payments would last.
"I was thinking, am I doing this right? I should be contacting my children to see, but like I say, he didn't give me the opportunity to do that," Dobson said.
Dobson, 77, said he asked for time to consult his family, but the salesperson told him the "special deal" would expire if he did not sign immediately.
It wasn't until later he looked closely at the contract and realized its total value was $7,879.80.
"I said, holy mackerel, this is a lot of money. I mean, I'm on a fixed income and I don't have any big pensions or anything," he said.
Both sides must abide by contract: province
A spokesperson for the province told CBC News by email if customers have a contract with the company, both sides must still meet their contractual responsibilities.
"The province does not have authority to have these contracts voided or to compensate consumers for the cost of any issues they may have regarding their AES [Atlantic Environmental Systems] water system," the email read.
Customers who have concerns must take them up with the company or their financing agency, or by seeking independent legal advice.
In the decision to cancel Atlantic Environmental Systems' direct sellers permit, the registrar for the Direct Sellers' Regulation Act said she accepted that some — though not all — customers felt pressured to buy a water system.
Kelly Wyer reviewed the company's call scripts and sales training methods, listened to recordings of calls between the company and customers, and read the company's presentation handbook.
Wyer wrote in the decision she felt the company's sales methods caused "confusion and misunderstandings" for two customers who complained to the province, so they did not fully understand their agreements.
"It seems that they were impacted by a high-pressure sales process where the salesperson did not give them enough time to absorb and understand the information presented before pressuring them to sign the sales contract or loan agreement," Wyer wrote.
Wyer also found it was standard for the company to install the water system the next day or as soon as possible.
"The timing of this process does not give the consumer a chance to think about their purchase or to decide if they want to cancel their contract within the 10-day cooling-off period," Wyer wrote.
She wrote that under the act, the 10-day cancellation period is a "key component to ensure consumer protection."
Company statement pushes back
Tan, the company's lawyer, said in a statement that Atlantic Environmental Systems has several complaints about the decision. It especially takes issue with Wyer's finding that the company's scripts resulted in "high-pressure" tactics, he said.
The statement said the company uses "model" scripts that were "reviewed, approved, and adopted" by the national body regulating water treatment products, and company owner Danny Goldman previously told CBC News the script follows a "strict code of ethics" by the Canadian Water Quality Association.
However, that association voted earlier this year to revoke the company's membership following a decision by the P.E.I. justice minister that found it in the public interest to cancel the company's vendor licence in that province.
The company also disputed the registrar's finding that it avoided cancellations during the 10-day cooling-off period.
Atlantic Environmental Systems said it was concerned that in "many cases" the actual complaints were filed by people who were not present during the sales meetings, and in some cases the purchasers themselves did not join in the complaint.
Wyer's decision makes it clear in several cases the complainants were adult children who were complaining on behalf of their parents, but CBC News cannot verify the identity of all complainants due to redactions in the decision issued to the media.
"These concerns, among many others, lead [Atlantic Environmental Systems] to the conclusion that it must appeal the decision immediately," wrote Tan.
'It made me feel sick'
Dobson was not one of the customers whose case was examined by the registrar at the company's hearing with the province in May.
His children didn't realize until reading CBC News articles about Atlantic Environmental Systems that their father dealt with the same company.
Jennifer Keefe, Dobson's daughter, said she contacted the company in May after reading the contract her father signed. She asked for the system to be removed and his money refunded, but the family was well past the 10-day cancellation period.
"I just felt like he was taken advantage of and it made me feel sick," she said.
She said the company offered a further water test but would not do a refund.
Keefe said she feels it was unreasonable to ask her father to absorb and understand a 14-page contract filled with legal terms during the time the salesperson was in his home.
"After listening to a presentation that was three hours long, he was tired. It was suppertime and he agreed to it," she said.
"And, you know, in hindsight, we now know that it's very good to ask more questions."
Service Nova Scotia said the registrar's decision only prevents the company from direct selling such as door-to-door sales.
The company can continue to sell water systems and support customers out of their business location in Burnside industrial park.
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