Charlie Demosani said yes when someone came to his door offering to replace his eight-year-old water heater, rented from Direct Energy.
A few months later, he noticed that his home heating bill had climbed. He called Enbridge Gas, only to find out that the person who had replaced his water heater had also switched him from his old gas supplier (Direct Energy) to a new one (Summitt Energy).
His new contract had a fixed rate of 46.8 cents a cubic metre, compared to Direct Energy's current rate of 34.9 cents and Enbridge's current rate of 23.5 cents.
"My brother is 79 years old and he thought that he was only signing for the replacement of the water heater," said Anthony Demosani, who asked me for help.
Gaetana Girardi, compliance director for Summitt Energy in Mississauga, agreed this week to cancel Demosani's contract.
Door-to-door energy retailers often use misleading claims when trying to persuade people to enter into binding contracts at a fixed price. Instead of explaining who they are, they may say they're working with the local utility, checking the meter or switching on the gas or electricity in a new home.
Suppose you have second thoughts and want to cancel an energy contract you agreed to before it ends. Can you get out without paying a hefty fee?
After writing about this issue in my column and on my blog, I know what works and what doesn't work when asking for an early release.
Most companies will release seniors, 75 years or older, especially if there's any question of their capacity to understand the transaction. They will release people who can prove their income is very low. Living on old-age security or an Ontario disability pension can usually get you out early.
They will release people who move to an area where the retailer doesn't operate or to a building where gas and electricity are already provided.
What if you ask a retailer to cancel your contract because you thought you would save money and found you were paying more?
Forget it. Locking into a fixed-price deal is a gamble – and you may not win.
Greg McCamus, president of Superior Energy Management, recently wrote to a customer who had signed a gas deal and wanted out because prices had fallen.
"I am sure that over the five-year term, you will see that short-term rates for gas will continue to be volatile. That's why we feel a protection plan is of value to you – even if at a point in time it is `out of the money.'"
What if you ask to be released because of a sales agent's misrepresentation?
After a 10-day cooling-off period for contracts sold at the door, you will get a call from the retailer to confirm you want to go ahead.
The call is recorded by the retailer and supplied to you if you ask.
If you complain about deception, some companies will track down the agent to confirm what you said. Others will simply listen to the reaffirmation call and make their decision accordingly.
Here's the problem: It's hard for you to prove what was said at the door, but easy for retailers to prove what you said on the phone (because they keep a copy of the reaffirmation call).
Next week, we'll look at how to get out of an energy contract when it expires. If you don't respond in writing, you may be renewed automatically at a higher price.
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