Customers who bought water systems after 'aggressive' sales pitch must still honour contracts

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 withAtlantic Environmental Systems, a Dartmouth, N.S.-based water purification company.

He deeply regrets enteringthe contractwhich he says he signed after a sales presentation at his homein Halifaxthat 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 CBCNews in a recent interview.

"It was driving me crazy."

On July 18, the Nova Scotia governmentcancelled 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 companymust honour their sales agreements and pay for the equipment even if they don't want it.

• N.S. revokes sales permit for water treatment company after customer complaints

In awritten decision provided to CBCNews, 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, Dobsonsaid hereceived 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 impressionwas that the cost of the water systemwould 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, butthe 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 itstotal valuewas $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 CBCNews 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.

• N.S. woman gets $12K refund from water company under scrutiny by province

Customers who have concerns must take them up withthe company or their financing agency, or by seeking independent legaladvice.

In the decision to cancel Atlantic Environmental Systems' direct sellers permit, the registrar for the Direct Sellers' Regulation Act said she accepted that somethough 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 toinstall 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 Systemshas 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 CBCNews the script follows a "strict code of ethics" by the Canadian Water Quality Association.

However, thatassociation 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 interestto cancel the company's vendor licence in that province.

• Justice minister doubles down on not letting water treatment company sell on P.E.I.

Thecompany also disputedtheregistrar's finding that it avoided cancellations during the 10-day cooling-off period.

Atlantic Environmental Systemssaid 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 CBCNews 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 decisionimmediately," wrote Tan.

'It made me feel sick'

Dobson was not one of the customers whose case was examined by the registrar at the company'shearing with the province in May.

His children didn't realize until reading CBCNews 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.

Atlantic Environmental Systems customers still on the hook

2 months ago

Duration 2:11

Last week, the Nova Scotia government revoked the company's direct sellers permit after customers complained of 'aggressive' and 'high-pressure' sales. The company plans to appeal the decision. As Shaina Luck reports, dissatisfied customers who bought the system may have to keep paying.

Keefesaid 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."

Why homeowners wish they'd shut the door on this water treatment company

5 months ago

Duration 8:03

CBC spoke with several customers in Nova Scotia who dealt with sales people from Atlantic Environmental Systems a company that was recently barred from doing sales in P.E.I. CBC Investigative reporter Angela MacIvor has the story.

Service Nova Scotia saidthe 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.