Summitt Energy pay $495,000 for what it calls unfair practices in the sale of energy contracts.

June 19, 2010

Ellen Roseman

The Ontario Energy Board wants to make Summitt Energy pay $495,000 for what it calls unfair practices in the sale of energy contracts.

The Toronto-based company paid a $70,000 fine in January 2009 for similar offences in selling energy door to door.

Five Summitt agents made deceptive statements to consumers or failed to deliver written copies of contracts within 40 days of signing, as required by law, the board said – pinpointing 28 incidents of such behaviour.

Here are some misleading sales practices that the board said its investigation unearthed:

• Not identifying themselves as Summitt agents and telling consumers they worked for a regulated utility or the Ontario Energy Board.

• Failing to explain that consumers were being asked to sign a five-year contract for gas and electricity supply and failing to state the price to be paid.

• Telling consumers they had to sign a document to have their smart meter for electricity installed or activated.

• Saying the market price of natural gas was 41 cents a cubic metre at a time when it was less than half that amount.

• Falsely saying that if natural gas prices fell, the contract price would also fall.

Summitt did not respond when asked to comment Friday. Nor did it say whether it would ask for a hearing.

I’ve helped many readers cancel their Summitt energy contracts without penalty in the past few years. But the pace is slower than it once was.

Compliance specialist Tamara Sinson recently told me she needed at least three weeks to resolve complaints. Most firms I contact can resolve complaints within a week or two. Some do it within a day of receipt.

Summitt watches real estate sales closely to find new homeowners who are susceptible to its pitch.

Peter Ng bought a Markham townhouse last November. Ten days later, a Summitt agent came by and said the townhouse committee had a contract with his company to supply electricity and gas.

“He said if I didn’t sign, my utilities would be cut off,” Ng says. “I feared the water lines in my house would freeze over at night.

“He showed a list of names of every household in the area to prove his claim. He even had the previous owner of my house listed, saying he had to transfer the account to me. So I ended up signing.”

Ng realized he had been deceived after talking to other townhouse owners. But when he tried to cancel, he was told he had to pay $2,122.79 in liquidated damages as indicated on his contract – which he had never received.

Water heater replacement, a new business activity for Summitt, is not policed by the Ontario Energy Board. It’s become a growth area for deception at the door.

David Manga says a Summitt agent came to his home last January, pretending he came from Enbridge Gas to replace their aging hot water tank.

His wife signed a contract, which Manga cancelled right away. But he found charges from Summitt on his gas bill the following month.

His wife had unknowingly agreed to a two-year carbon offset plan at $14.99 a month. And he had to pay a penalty equal to the balance of the contract ($262.50) to get out.

It seems unfair to sneak in a green energy plan while claiming to replace a water tank – and to penalize customers for cancelling when carbon emission credits can be traded on the market.

At last, the Ontario Energy Board is cracking down on deceptive energy sales practices. To read the 17-page list of charges, go to http://www.oeb.gov.on.ca, click Industry, then go to Media Room and look at What’s New (June 17, 2010).

Ellen Roseman writes about personal finance and consumer issues.