Water heater salesmen knocking again
New firm owned by familiar name
By Hugh Adami, Ottawa Citizen September 4, 2011
Remember Universal Energy Corp. and its parent company, Just Energy Group Ltd.?
Universal was fined $127,500 by the Ontario Energy Board in 2009 for noncompliant practices," which included false and misleading statements to consumers. A few months later, Universal was fined another $60,000, again for non-compliance complaints. Those complaints also involved false and misleading statements.
Universal, a hydro and gas provider, doesn't "actively market" anymore, says Gord Potter, Just Energy's vicepresident of regulatory and legal affairs. The big knock against Universal, and various others that came into existence after the Competition Bureau opened up the energy market almost a decade ago, was unscrupulous door-to-door sales agents. They were accused of misleading consumers with promises of huge savings if they switched energy providers. But the bills would often end up being much higher, contracts were long and cancellation penalties were exorbitant. The Public Citizen was able to get Lynne Cournoyer's Universal contract cancelled shortly after the single mother of two fell victim in 2009.
There's another Just Energy company making the rounds these days. National Home Services was acquired by Just Energy about two years ago. Among its services are water heater rentals. And if complaints from consumers are true, it would appear National's sales agents must have been transferred from Universal.
So far though, National hasn't run into trouble with regulators.
Potter says the company has a thorough followup process in ensuring that new customers know exactly what they're buying into, and contracts are very clear.
Still, there are plenty of stories about National sales personnel and the playbook of opening lines they use to get your signature on a new contract.
For example: "We're replacing all water heaters on this street with more energy-efficient ones. When would it be convenient for our installer to drop by with your new tank?"
A National sales agent used a similar line last February on Lucien Binette and Theresa Beaudoin, senior citizens from Smiths Falls. They thought it odd to be replacing a water heater that was only a year old, yet they agreed, signing a 15-year contract with National. But the paperwork indicated that their new tank was an E40G and the one removed was an E40G, too. So what are they saving in energy costs, they wonder. They know their rental fee is $2 more than Direct Energy's, but they did get the first two months for free. Another concern is that National still hasn't returned the old tank to Direct Energy, so the couple is still paying the rental on that tank as well. That's about $10 to Direct Energy and around $12 to National every month.
Potter says he'll make sure the old tank is located and returned.
There have been complaints about other companies renting water heaters - Ontario Energy Group, LivClean and MorEnergy among them.
The competition is obviously doing such a good job of luring away customers from Direct Energy and Reliance Home Comfort - which dominate the market - that the two have websites with warnings of salespeople with tall tales. Direct Energy also has a radio ad, warning consumers about water heater tricksters.
National is undoubtedly the biggest thorn for Direct Energy and Reliance. Water heater rentals at National alone have reached 120,000.
There have been various reports of sales agents telling potential customers that they are water heater inspectors from the government, their tanks are hazardous or their provider is no longer in business.
"You're going to have some consumer dissatisfaction," says Potter. "But overall, we run a very highquality (business).
"It's a very, very competitive market, There is a lot of activity. ... We happen to be the biggest competitor (to Direct Energy and Reliance). So they've become very, very aggressive in trying to stop the erosion of their customer base. It's understandable. And we're giving people great value."
The Ontario Ministry of Consumer Relations says water heater rentals was third on the Top 10 list of consumer complaints in 2010, with 1,974 - 502 more than motor-vehicle sales, which was fourth. Collection agencies were the worst, with 5,041 complaints, followed by home renovations/repairs, with 2,547.
Complaint statistics from the Ontario Energy Board's website are not the freshest, but Just Energy companies were leading the pack from January to March 2010 with a total of 334.
The board doesn't break down the number company by company. The Better Business Bureau says it has received 82 complaints concerning National Home Services from residents in midwestern and central Ontario over the past three years. Most were resolved. And an August 2010 CBC report says 20 complaints about National were filed with the Ottawa Better Business Bureau. Again, the majority were resolved.
Ottawa resident Claire Whitty contacted The Public Citizen about being "scammed" into signing a 15-year contract with Ontario Energy Group on Aug. 22.
"A young man in a uniform ... told me that Hydro Ottawa was replacing all rental hot water tanks with new ones that saved energy and would cut down on hydro costs."
The next day, she became suspicious and was able to confirm the story was bogus through Reliance, which provides her water heater.
Whitty, who is in her 70s, called the province's consumer services branch. It told her it has received many similar complaints. She was in luck though. Under Ontario's consumer laws, she had 10 days to cancel the contract without penalty. She phoned Ontario Energy Group to cancel the contract and also sent the company a registered letter. The installers never showed up, so she should be safe. I couldn't get through to anyone at the company to confirm her contract had been cancelled.
General advice when sales agents come to your door is not to sign anything until you have a chance to research what information they provide, or bid them a quick goodbye.
