ACTION LINE: How not to take a bath on the water heater rental game
We know the water heater guys are slinging mud.
They’re suing each other and filing complaints about their competitors. The “other guy” is doing dirty business, not them.
But all you want as a consumer is hot water.
A few years ago, we were all told the so-called “free marketplace” was the way to go. But we should have known nothing in life is free. What the politicians and economists predicted is one thing. What unfolded is very different.
We deregulated gas suppliers. That led to very aggressive and unethical sales tactics. Firms trying to get you to sign a long-term contract went to any lengths to get your business.
A similar situation prevailed in the cellphone industry, where contracts are difficult to terminate and contain many clauses which are poorly explained.
Today, it’s the water heater rental firms.
Even real estate agents have written me, trying to understand what is happening. New home builders are selling homes with rental water heaters included in the purchase.
If you sell that home, the next purchaser inherits that rental agreement, which they have likely never seen.
If you try to buy your way out of an agreement, you could pay thousands of dollars, only to learn you have nobody to service the unit should something go wrong.
K.P. Tran owns a convenience store in Hannon and lives on the property. He pays $57 a month for his rental water heater and says he was told it would cost him $3,700 plus tax to buy it. He has never seen the rental contract which he allegedly inherited when he purchased the property.
“I’ve been asking to see the contract for more than a year,” Tran says.
A salesperson, who’s worked for several of the major rental firms, told Action Line that home builders benefit from their water heater installations.
“Many of the rental firms have been harassing their own customer base with scare tactics and misleading information to try and hold onto business,” he says. “This business exists because home builders have much to gain.”
According to the salesperson (whose identity we are protecting) new home builders are approached by rental providers, seeking new customers.
“These providers pay several hundred dollars per home for the right to install their equipment. With this cash, the builder pays his heating contractor to run the gas line into the home from the gas meter. The gas company is only responsible for everything up to the meter. By putting in a rental tank the builder doesn’t have to purchase or install the tanks, or pay to have gas lines run into the homes.”
“Builders often opt for rental water heaters in order to provide peace of mind to their homebuyers,” Hamilton-Halton Home Builders’ Association executive officer Mathieu Langelier tells us.
“In case of problems with water heaters, purchasers don’t need to worry about complicated warranty documents from the manufacturers or finding a good plumber who won’t charge them astronomical extras for fast service. With rental water heaters, homebuyers can get fast and reliable service. That is the main reason why builders chose rental water heaters.”
He said rental firms do submit offers to home builders, but the terms of those agreements are private.
Homeowner Gayle Hare recently succumbed to a door-to-door salesperson who had her agree to switch rental firms. Then she read our Dec. 27 column, which detailed how Reliance Home Comfort Limited is suing National Energy Corporation (National Home Services), a subsidiary of Just Energy Group Inc. for allegedly “using unfair practices and misleading representations.” Reliance also filed a complaint against National and MorEnergy Services Inc. with Ottawa’s Competition Bureau, but that agency announced it is filing a $25-million suit against Reliance and Direct Energy Inc.
“This is quite confusing to the consumer who is trying to do the right thing!” she wrote.
Here’s what you can do:
• Be fully aware of the terms and conditions of your existing agreement, when it expires and how much it will cost to terminate it.
• Don’t do business with salespeople who knock on your door uninvited.
• Demand to see the name and photo ID card of every salesperson.
• Research the cost of installing your own water heater and hiring someone to service it.
The Consumer Protection Act gives you 10 days to cancel contracts signed in your home. Cancel in writing.
Talk to your neighbours. Share your knowledge. Be proactive. Get competitive bids long before your existing agreement expires.
If you are an older homeowner and feel overwhelmed, make certain there’s someone you trust that can make decisions for you.
Hamilton Police Services has a Crimes Against Seniors Unit, 905-546-4925.
Continually check the Ontario Ministry of Consumer Services’ Consumer Beware List.
If you have a consumer problem, call 905-526-4665 or email
www.teambluesky.ca
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