UPDATE
Roseman: Beware door-to-door hot water tank sellers
June 23, 2010
Ellen Roseman
When retiree Bill Webb moved to cottage country last year, he fell for a pitch from a door-to-door seller to upgrade his hot water tank.
National Home Services took out his rental tank from Direct Energy and put in a new one that came with a 15-year contract.
“The tank was poorly installed,” Webb says. “I had to call them to fix an exhaust pipe that was leaking fumes into our house, which was kind of scary.”
His 50-gallon tank is too large for his needs, since the company had no 40-gallon units. And if he removes it, he’ll have to pay more than $1,000 in early cancellation fees.
National Home Services, owned by Just Energy Income Fund, had 77,000 customers under contract on March 31 and is adding more each week. Rebecca MacDonald, executive chair, says the business will be generating positive cash flow next year.
Most rentals come from Direct Energy customers. Some people want to get a new tank that is more efficient and is inspected once a year. (DE doesn’t do service calls for its rented water heaters until they break.)
Other people mistakenly assume they’re dealing with Direct Energy or Enbridge Gas, which does the billing for DE. They don’t read the contract until after they sign it.
Direct Energy has more than one million water heaters rented to Ontario homeowners, who prefer paying $15 to $20 a month to buying their own units.
But intensified competition led to a loss of 2 per cent of its customer base in the last quarter of 2009, says John Macdonald, chief executive of Consumers’ Waterheater Income Fund.
(CWIF, which trades on the Toronto Stock Exchange, has a partnership with Direct Energy to provide service for its water heater portfolio in return for 35 per cent of the rental revenues.)
In response, DE has launched a loyalty program for water heater rentals and has started doing more frequent replacements of tanks that are 10 to 15 years old. Their useful life is 16 years.
Customers can gain from the water heater wars if they stay with their existing suppliers. But for those who switch, life isn’t as easy.
Echoe Holowchuk and Kyle Lambetz were customers of Reliance Home Comfort, a water heater rental supplier spun off by Union Gas, when a Direct Energy representative came to their door in Baden, Ont.
He promised to upgrade their piping, give them a more energy-efficient tank and throw in six months of free water heater rentals. He also said Direct Energy would remove the old water heater and return it to Reliance.
But for the past year, the couple has been getting bills from Direct Energy and Reliance. It seems their old water heater was lost in transit.
“We’ve called Direct Energy dozens of times. They promise us it will be taken care of, but it never is,” Holowchuk says.
Direct Energy promised not to bill them until the Reliance bills stopped, but sent a letter last week saying they had to pay for the past year because of a billing error. DE spokeswoman Crystal Jongeward told me she would check into their case right away.
This summer, an estimated 600,000 households will be visited by door-to-door sellers trying to replace a rental hot water tank, says the Consumers’ Waterheater Income Fund.
Research shows that more efficient Energy Star water heaters will yield savings of less than 10 per cent, while a survey by CWIF showed that one third of people expected savings to exceed 20 per cent. (Find out more at http://www.hotwaterfacts.ca.)
My advice: Ask for identification. Don’t let a salesperson into your home. Don’t switch before doing your research. And if you sign a contract at the door and change your mind, remember to cancel within the 10-day cooling off period.
Ellen Roseman writes about personal finance and consumer issues.
New Door to Door Sales Regulations
As of March 1, 2018, under the Consumer Protection Act, many energy-related products and services (listed below) can no longer be offered or sold door to door or in your home unless you've initiated the transaction (for example, you called or emailed the business and asked for a home visit). There are some exceptions if you have a contract already in place.
The products and services included in this new legislation are: furnaces, air conditioners, air cleaners, air purifiers, water heaters, water treatment devices, water purifiers, water filters, water softeners, duct cleaning services, any good or service that performs one of more of the functions listed above (for example, an HVAC system).
For more details, visit the Ministry of Government and Consumer Services.
Roseman: Beware door-to-door hot water tank sellers
June 23, 2010
Ellen Roseman
When retiree Bill Webb moved to cottage country last year, he fell for a pitch from a door-to-door seller to upgrade his hot water tank.
National Home Services took out his rental tank from Direct Energy and put in a new one that came with a 15-year contract.
“The tank was poorly installed,” Webb says. “I had to call them to fix an exhaust pipe that was leaking fumes into our house, which was kind of scary.”
His 50-gallon tank is too large for his needs, since the company had no 40-gallon units. And if he removes it, he’ll have to pay more than $1,000 in early cancellation fees.
National Home Services, owned by Just Energy Income Fund, had 77,000 customers under contract on March 31 and is adding more each week. Rebecca MacDonald, executive chair, says the business will be generating positive cash flow next year.
Most rentals come from Direct Energy customers. Some people want to get a new tank that is more efficient and is inspected once a year. (DE doesn’t do service calls for its rented water heaters until they break.)
Other people mistakenly assume they’re dealing with Direct Energy or Enbridge Gas, which does the billing for DE. They don’t read the contract until after they sign it.
Direct Energy has more than one million water heaters rented to Ontario homeowners, who prefer paying $15 to $20 a month to buying their own units.
But intensified competition led to a loss of 2 per cent of its customer base in the last quarter of 2009, says John Macdonald, chief executive of Consumers’ Waterheater Income Fund.
(CWIF, which trades on the Toronto Stock Exchange, has a partnership with Direct Energy to provide service for its water heater portfolio in return for 35 per cent of the rental revenues.)
In response, DE has launched a loyalty program for water heater rentals and has started doing more frequent replacements of tanks that are 10 to 15 years old. Their useful life is 16 years.
Customers can gain from the water heater wars if they stay with their existing suppliers. But for those who switch, life isn’t as easy.
Echoe Holowchuk and Kyle Lambetz were customers of Reliance Home Comfort, a water heater rental supplier spun off by Union Gas, when a Direct Energy representative came to their door in Baden, Ont.
He promised to upgrade their piping, give them a more energy-efficient tank and throw in six months of free water heater rentals. He also said Direct Energy would remove the old water heater and return it to Reliance.
But for the past year, the couple has been getting bills from Direct Energy and Reliance. It seems their old water heater was lost in transit.
“We’ve called Direct Energy dozens of times. They promise us it will be taken care of, but it never is,” Holowchuk says.
Direct Energy promised not to bill them until the Reliance bills stopped, but sent a letter last week saying they had to pay for the past year because of a billing error. DE spokeswoman Crystal Jongeward told me she would check into their case right away.
This summer, an estimated 600,000 households will be visited by door-to-door sellers trying to replace a rental hot water tank, says the Consumers’ Waterheater Income Fund.
Research shows that more efficient Energy Star water heaters will yield savings of less than 10 per cent, while a survey by CWIF showed that one third of people expected savings to exceed 20 per cent. (Find out more at http://www.hotwaterfacts.ca.)
My advice: Ask for identification. Don’t let a salesperson into your home. Don’t switch before doing your research. And if you sign a contract at the door and change your mind, remember to cancel within the 10-day cooling off period.
Ellen Roseman writes about personal finance and consumer issues.
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