It sounds great in concept.
Get a new, high efficiency water heater, furnace, boiler, water softener, water filter, air conditioner, or other home equipment for a low monthly rental fee and 24/7 technician service if anything goes wrong. To top it off, the unit’s higher efficiency will save you money on your existing energy bills.
Now, if the program was rent-to-own or the total cost ended up being a small premium over the full price of the unit installed – similar an extended warranty – I expect many consumers would be happy to opt in for the ‘peace of mind’.
However, that’s not what the notorious HVAC rental companies are selling. They take the rental concept as far as it will legally go (and them some, in some cases).
For decades, many have used deceptive, high-pressure, many times illegal sales tactics while pitching sales via door-to-door, telemarketing or other direct marketing approach to push customers into long-term 10 to 15 year contracts that end up charging customers 3 to 5 times more than the equipment would actually cost to buy and install.
These contracts cost tens of thousands of dollars to cancel or break, even though the retail value of the unit is only a few thousand.
They then assign or sell the contracts to an associated “financing” company that places a lien on the property without notifying the homeowner and simply receives payments and collects the debts owed.
A lien, or Notice of Security Interest, is a note on the property’s title that indicates a lender (HVAC contract holder) has a claim to a debt owed by the homeowner and gives them the right to block the sale or refinancing of a home until the debt is resolved – typically by paying a fee of thousands of dollars.
The HVAC companies know that the homeowner won’t find out about the security interest until they attempt to sell or refinance their home.
At this point, it is likely too late in the game to do anything about it, and their options are limited: try to pass the contract over to the new owner (this worked well in the recent hot housing market, where it was difficult for buyers to place conditions or negotiate the sale), or pay a fee of $10,000 to $15,000 to cancel the lien.
All that a buyer may see on their Agreement of Purchase and Sale (APS) is the item(s) listed in section 6:
They can request a full copy of the associated agreement that this section refers to, but most don’t know that is an option.
These contracts are very profitable for the rental companies and a bad deal for the majority of their customers.
Purchasing your own unit can result in substantial savings over time, according to the Competition Bureau, and renting these appliances is not common practice in Canada outside of Ontario.
I collected the names of the companies and industry participants as well as consumers’ stories in one place – focusing on Ontario – to piece together the business model these companies use in an attempt to make the HVAC rental industry more transparent, show consumers the warning signs and illustrate that it is still alive and well.
Year-after-year, new brands pop up, using new sales tricks, workarounds and legal loopholes to build a collection of rental contracts, pay the applied fines and legal settlements, and cash out by selling to an “asset management” company for millions of dollars. Millions of dollars that are taken from the pockets of unsuspecting homeowners.
The HVAC rental ‘business model’ (read: scam) typically goes something like this:
Step 1. Create new companies with generic, but legitimate-sounding names
A new HVAC company is incorporated with a generic, friendly-sounding name using terms such as “Green”, “Comfort”, or pseudo-official sounding with “Ontario”, “Consumers” and “Standards”.
While the companies are not affiliated in any way with the Ontario government or any government agency, with names like “Ontario Safety Standards” or “Ontario Energy Group”, it can sure sound like it, and consumers have reported making those assumptions over the years.
These operations typically use up to 3 different corporate entities, which makes undoing the deals more difficult. One for:
- Sales – Enlisting commissioned salespeople to perform direct sales to consumers and get contracts signed
- Installation – Physically installing the equipment (often sub-contracted)
- Financing – Holding contracts and receiving monthly payments and collecting customer debts
Since 2010, a large number of home services companies have sold rental contracts to consumers:
- Canadian Home Improvement Credit Corporation (CHICC Financial Corp) $45 million water heater rental portfolio was founded by Eamonn Glavey in 2010. The company is listed as a biller in Enercare’s billing service.
- Simply Green Home Services (SGHS) was founded in 2013 by Lawrence Krimker and Joseph Krimker.
- Ontario Green Savings was founded in 2017 by Saeed Torbati as the successor to Ontario Safety Standards, Ontario Stars and Canadian Safety Standards which he founded in 2015. Their websites went offline in 2018, 2018, and 2019 respectively.
- Consumers Energy Home Services Inc. was incorporated in 2022 by Ross Palfrey, who says he works for Green Savings Group on opening an additional branch.
Bankrupt, acquired or shut down
- Eco Energy Home Services Inc. was founded on May 29, 2009 by Wei (David) Ouyang. It filed for bankruptcy February 2019 and had 106 rental agreements at the time. Its sister company and contract holding entity EcoHome Financial Inc. was acquired by Dealnet Capital in 2016, which was then acquired by SGHS in 2020.
- Ontario Consumers Home Services and Simply Comfort Home Services were founded in 2010 by President Vitali Godonooga and CEO Vasili Tatarinov. They were acquired by SGHS in 2017.
- Ontario Energy Group (OEG) was founded by Evgueni (Eugene) Farber in 2012. The company stopped selling in 2016 and were acquired by SGHS September 2020.
- Green Planet Home Services was founded in 2013 by Larry Galbo, President and CEO of Green Planet Home Services. It was acquired by SGHS in 2017 and 2020 for a total of $27.5 million.
- Nationwide Home Comfort was founded in 2013 by Perry Kemp (who was Director of Marketing for Eco Energy Home Services from 2010 to 2014) and Roman Berson (who was Director of Operations for Eco Energy Home Services from 2010 to 2014). It was acquired by Home Trust in 2017, and then by SGHS in November 2018.
|Name||Corporation||Incorporation/Start Date||End Date||Address||Director|
|Eco Energy Home Services||Eco Energy Home Services Inc.||May 29, 2009||Bankruptcy April 16, 2019||3761 Victoria Park Ave Units 10 & 11, Scarborough, ON M1W 3S3||Wei (David) Ouyang|
|EcoHome Financial||EcoHome Financial Inc.||2009||Acquired by Dealnet Capital in 2016, then Simply Group in 2020.||130 King St W Suite 501, Toronto, ON M5X 1C7||Wei (David) Ouyang|
|Ontario Energy Group (OEG)||MDG Newmarket Inc.||2012||Selling ended 31/12/2016, acquired by Simply Group September 2020||5060 Spectrum Way Unit #302 Mississauga, ON L4W 5N5||Evgueni (Eugene) Farber|
|Green Planet Home Services||Green Planet Home Services Inc.||January 5, 2013||Acquired by Simply Group in 2017 and 2020||204 – 45 Sheppard Ave E, North York, ON M2N 5W9||Larry Galbo|
|Canadian Home Improvement Credit Corporation||CHICC Financial Corp||July 2013||January 2021||200 – 2600 Skymark Ave Bld 10, Mississauga, ON L4W 5B2||Eamonn Glavey|
|Simply Green Home Services (SGHS)||Simply Green Home Services Inc.||2013||Present||2225 Sheppard Ave E Suite 800, Toronto, ON M2J 5C2||Lawrence Krimker|
|Nationwide Home Comfort||Nationwide Home Comfort Inc.||2013||Acquired by Home Trust in 2017, Simply Group in 2018||240 Riviera Drive, Unit 2 Markham, Ontario L3R 5M1||Perry Kemp, Roman Berson|
|Canadian Safety Standards||Safety Standards Group Inc||May 20, 2015||283 Dalhousie St, Ottawa, ON K1N 7E5||Saeed Torbati|
|Ontario Safety Standards||Ontario Stars Corporation||2015||283 Dalhousie St., Unit 300, Ottawa, ON K1N 7E5||Saeed Torbati|
|Canadian Homeowner Protection Association||May 6, 2016||40 King Street West, Suite 5800, Toronto, ON M5H 3S1||Vitalii Godonooga, Kirill Tatarinov, Lawrence Krimker|
|VIVA Funding Group Inc.||June 7, 2016||1010-2225 Sheppard Ave East, Toronto, ON M2J 5C2||Vitalii Godonooga, Vassili Tatarinov|
|Ontario Consumers Home Services||Ontario Consumers Home Services Inc.||December 30, 2016||Bankruptcy October 1, 2020||2225 Sheppard Ave E #1501, North York, ON M2J 4Y1||Vitalii Godonooga, Eugene Savitskiy|
|Viva Financial Corporation||2659675 Ontario Inc.||Bankruptcy October 1, 2020||2225 Sheppard Ave E Unit 1503 North York, ON, M2J 5C2 Canada||Vasili Tatarinov|
|Viva Home Comfort Inc||March 2017||2 – 273B Bowes Rd, Concord, ON L4K 1H8||Vitalii Godonooga|
|Ontario Green Savings||10392197 Canada Corp.||September 4, 2017||Present||100 King Street West, Suite 5700 Toronto, ON M5X 1C7||Scott Hill, George Elias Nehme|
|Simply Comfort Home Services||Simply Comfort Inc.||Bankruptcy October 1, 2020||2225 Sheppard Ave E Suite 1501 North York Canada||Vitalii Godonooga|
|Sandpiper Energy Solutions||Sandpiper Energy Solutions Inc.||April 26, 2021||Acquired by Simply Group in 2016||2225 Sheppard Ave E., Suite #800, Toronto ON, M2J 5C2|
|Consumers Choice Comfort Services||Consumers Choice Comfort Services Inc.||Bankruptcy October 1, 2020||273-B BOWES ROAD UNIT 1 & 2 VAUGHAN, Ontario L4K 1H8 Canada||Eugene Savitskiy|
|10257605 Canada Inc.||May 30, 2017||1100-130 Slater Street, Ottawa, ON K1P 6E2||Saeed Torbati|
|Consumers Energy Home Services Inc.||July 15, 2022||130 Slater Street, 11 Ottawa, ON K1P 6E2||Ross Palfrey|
|14182928 CANADA INC.||July 15, 2022||130 Slater Street, 1100 Ottawa, ON K1P 6E2||Ross Palfrey|
Reliance Home Comfort and Enercare‘s predecessors – the water heater rental division of Union Gas (now Enbridge) and Consumers’ Gas Company, respectively – started the equipment rental industry in Ontario. They work with home builders to pre-install gas-powered water heaters to increase usage and reliance on Natural Gas as a source of fuel.
They rent HVAC equipment to 1.7 million Canadian households (primarily in Ontario) and 1.9 million customers in Canada and the US, respectively.
Step 2. Advertise in ways that can target susceptible customers
They often sell to vulnerable people including seniors, people with disabilities or those with English as a second language – anyone who will sign on the dotted line, including:
- New immigrants
- People who speak English as a second language
- Those who live alone
- Those with cognitive impairments
Many of the companies above used door-to-door salespeople – also known as direct selling – to build their portfolios of rental contracts. This includes the predecessors of Reliance and Enercare, which built a large portion of their customer base by selling door-to-door.
Natural Resources Canada plainly states that if someone is at your door or gives you a call and wants to talk about thermostats, water heaters, furnaces, or even replacement windows, it’s most likely a scammer.
Door-to-door sales banned
Ontario banned door-to-door sales of a specific list of household appliances on March 1st, 2018:
- Air cleaners
- Air conditioners
- Air purifiers
- Duct cleaning services
- Water filters
- Water heaters
- Water purifiers
- Water softeners
- Water treatment devices
- Bundles of these goods and services
However, they can still sell you these products and services to you in-person if you initiate the interaction such as by calling, emailing or filling out a form that asks them to come to your home for the purpose of entering into a contract.
On a lighter note, this is similar to vampires, which cannot enter a house unless invited by the owner according to folklore, but after the first invitation they can come and go as they please.
Calling for an energy assessment, repair, or maintenance or any reason other than entering into a contract does not count and they cannot sign you into a contract. They can only leave behind information about their offerings.
Alberta banned unsolicited door-to-door HVAC sales in 2017.
Door-to-door sales continue, with extra steps
The ban has done little to lessen the impact of the appliance rental industry on consumers.
To get around this new requirement, companies that sell door-to-door will now initially offer to install other devices that aren’t on the ban list, such as doorbell cameras or smart thermostats in return for a quick in-house questionnaire and a meeting with their representative, saying they have to send someone to see if the thermostat is compatible with your furnace.
Once they’re in your home, they’ll promote higher cost, more profitable equipment such as furnaces and water purifiers.
For example Ontario Green Savings advertises on Facebook and Google offering the free installation of a free Nest E, Nest 3rd gen, or Ecobee smart thermostat (approximately $200 to $250 value, before $75 rebate), promoting how much it will help you save on your energy bills:
However, according to the program’s Terms and Conditions, they will install the thermostat only after the sales pitch for rental contracts, and only if “you qualify”, requiring you to sign ‘documents’ in order to have the thermostat installed, leaving it unclear as to whether or not those documents are different from their rental contracts – with many Google reviews reporting not being able to get a free thermostat without committing to a rental contract.
Misrepresenting federal or provincial grants and rebates, such as the Greener Homes Grant
In 2022, CBC reported a pair of salespeople in bright-coloured construction vests and lanyards were knocking on doors in Hamilton, claiming the homes in the neighbourhood were eligible for an energy audit through a federally funded program, showing homeowners the Ministry of Natural Resources website and telling them “they received a grant from the government to promote this grant program”. The visits were followed up by representatives from HVAC company Brawn Bros.
Other companies have used unsolicited phone calls offering free service check ups, money-saving upgrades and energy rebates being offered by the province and municipalities.
Step 3. Perform an in-home
assessment sales pitch
Once in your home, they’ll say anything to get your personal information or your money.
Customers have warned that during the salesperson’s visit to a home, they may:
- enter your house with the thermostat or other promised free smart device neatly placed on top of his pile of tools for show, then look at the thermostat wires, ponder for a few seconds, demanded to see the HVAC system. Then say how the existing system is battery powered and the thermostat needs to draw power from the supply and therefore its incompatible. Then go through the Furnace/AC/HWT/etc and pick up on the oldest of the lot (the AC, in my case) and recommend how you need to replace it “yesterday” or risk your house getting destroyed by it any day now. Then whip up an insane payment plan for a new AC + maintenance (quoting $120 a month or thereabouts). They then of course sweeten the deal by installing the Nest Hub + the upgraded Thermostat with “bigger battery” BS!
- say they need to see the furnace and water heater to ensure they are energy efficient
- ask about the age of the furnace and air conditioning unit
- comment about a provincial government program encouraging everyone to update their heating and cooling systems to high-efficiency units
- comment on an upcoming Ontario carbon tax and say you’re going to eliminate it
- tell you that your tank or unit is illegal or not up to standards and need to be replaced
- say the equipment will help you save money
- turn water brown using electrodes in a glass of water to sell water purifiers
- say you must buy their services to get the free thermostat
- pressure you to sign the rental agreement without reading the Terms and Conditions
- pressure you to sign on the spot as they “Could only enact these savings while covering my postal code area and didn’t know when he’d be back”
- say your systems will need to be replaced in order for you to qualify for the rebates, but not to worry, the energy savings will more than help cover the cost of the upgrade
- point out the high cost of high-efficiency systems and make bundling a rental with a service package sound more affordable
- tell you that the equipment is free of charge under a provincial or federal program
- say you’ll save XX% on your hydro bill through a government program if you signed a lease agreement
If you agree, they will give you a contract to sign, either in-person or send it to you electronically.
Step 4. Install the equipment – quickly
Once the contract is signed, the companies act quickly to get the equipment into your home, with some customers reporting installations happening the next day, same day, or even less than two hours later.
Step 5. Start charging the customer
It is at this point that the contract is typically transferred, assigned or sold by the company that made the sale to an associated financing corporation.
In some cases, customers report never giving the company’s representative a payment method such as a credit card or banking details – all it took was showing a copy of their hydro bill. The monthly charge simply appeared on their next bill.
This has been possible thanks to programs like Enbridge Gas’ Open Bill Program or Open Bill Access (OBA) program which since 2009 has allowed third party companies, including those that sold rental contracts and provided loans for natural gas appliances, home improvements or energy efficiency initiatives, to piggyback onto Enbridge’s natural gas bills and charge their customers alongside the amount owing for natural gas – for a fee.
The automatic charges for rental agreements are added to a customer’s Enbridge bill, appearing in the “Charges From Other Companies” section. The HVAC companies can charge the customer directly or through a third-party financing company and do not need their own accounting and billing departments.
The program is currently used by 128 companies, including many of those in the table above. A large number of which are HVAC and loan companies as it makes it easier for them to start charging customers by accessing the 15 million people (3.8 million customers) Enbridge serves in Ontario and Quebec.
It also makes it less likely that they miss a payment on their rental contract, as non-payment could mean getting your gas shutoff, which runs your hot water heater, stove, dryer and/or others.
In 2018, the total dollar value billed was $691 million. A portion of the net revenues of the OBA program is given as a bill credit to Enbridge ratepayers each year. In 2019, it was $5.389 million.
According to the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI), a non-profit national trade association representing over 1,000 HVAC companies, “some in the industry have expressed concern that access to the utility bill has made it possible for a few companies to engage in questionable sales tactics with homeowners (door to door sales) by validating claims or suggestions of a special utility connection.”
HRAI raised questions about the OBA program to the OEB in 2020, during their review of Enbridge’s extension application for the program, including:
- how the billing service was being used (and potentially abused) by third parties;
- what measures Enbridge was using to guard against those alleged abuses;
- whether customers had proper protections from potential abuse under the terms of the program; and
- whether customers typically understood what protections they might have.
Enbridge Gas reported a list of billers that were on the Ontario Government Consumer Beware list at the time to the Ontario Energy Board (OEB):
- Canadian Home Improvement Credit Corporation and affiliated Ontario Go Green Corporation
- Energy Canada Home Services Inc and affiliated Energy Canada Home Comfort Ltd.
- Sunwave Home Comfort Inc and affiliated Cricket Home Comfort Inc.
- Ontario Home Services Inc.
- Ontario HVAC & Water Inc.
- Summitt Home Services LP
- Utilebill Credit Corp. and affiliated UtileCredit Corp.
Companies that were on the complete list of billers or current list of billers and are still on the Consumer Beware list:
- 2659675 Ontario Inc. (O/A “Viva Financial Corporation”)
- Crown Crest Capital on behalf of Simply Group
- Simply Green Home Services (Ontario) Inc. (O/A “Simply Billing Services”) and CEO Lawrence Krimker
- MDG Newmarket Inc. (O/A. “Ontario Energy Group”) (charges dropped when they agreed to settle complaints)
The current list of billers includes:
- Eco Energy Home Services Inc. assigned to EcoHome Financial Inc.
- Canadian Choice Home Services
- Canadian Energy Savings Corp.
- Canadian Home Improvement (Canadian Home Improvement Credit Corporation) and affiliated Ontario Go Green
- Consumers Choice Comfort Services Inc.
- Eco Energy Home Services Inc.
- Cricket Home Comfort Inc.
- Eco Green Home Comfort Inc.
- EcoHome Financial
- GreenOn Energy
- Livegreen Home Comfort
- L.G. Home Comfort
- ONEnergy (Sunwave USA Holdings, Inc.)
- Ontario Home Services
- Ontario HVAC & Water
- Sandpiper Energy Solutions
- Simply Comfort
- Simply Smart Financial
- Viva, VIVA Funding Group, which negotiated their charges away
- Sunwave Home Comfort
Enbridge agreed to run the service in its current form until effective Dec. 31, 2023 (after which the agreement would be renegotiated) or it is expanded into the Union Gas service area.
The following companies signed on until October 31, 2024 and as you might expect, the companies sticking with the program are mostly those that sell long term, high interest loans and contracts with high termination fees on HVAC equipment:
When consumer complaints about these companies reach the media, Enbridge has repeatedly distanced itself, stating that it does not sell or rent any gas appliances, offer furnace servicing, sell natural gas supply contracts, or offer any financing services:
“These companies are not owned by or affiliated with Enbridge and we do not recommend, endorse or guarantee the products or services offered by such companies,” “Enbridge does not provide the … services and does not authorize any other companies to provide them on our behalf,” she said.–Tanya Bruckmueller, a spokeswoman for Enbridge
A 2006 report by Direct Energy (Enercare’s predecessor) supported Enbridge’s development of a Open Bill Access program as it would “promote and increase natural gas usage by making natural gas appliances such as furnaces and water heaters more accessible to consumers”.
Step 6. Place a lien on the property
Probably the most important step of the process is when the financing/holding company places a Notice of Security Interest on the customer’s property. This enables them to hold up the sale or refinancing of their home until their demands are met, ie. the homeowner pays the fee to break or buyout the lien.
The lien is typically in the realm of $12,000 to $15,000 – the highest amount they think they can charge, but low enough that it would likely cost the homeowner more to take them to court.
The holding company doesn’t really care how the contract was obtained or what type of equipment it includes, it’s all about collecting the money owed to them, either over the long term, or in a larger lump sum buyout or lien cancellation fee.
Step 7. Grow as quickly as possible
The companies boast on their websites and in press releases about how quickly they’re growing or how well they treat their employees:
- CHICC (Canadian Home Improvement Credit Corporation) places No. 9 on The Globe and Mail’s 2019 Canada’s Top Growing Companies, with three-year growth of 3,263% and number 16 on Canadian Business’ Growth List.
- Ontario Green Savings is ranked 20th on Canadian Business’ 2019 Growth List with two-year revenue growth of 785%.
These badges feature prominently on their websites, giving the companies legitimacy in the eyes of consumers:
Step 8. Sales company develops a poor reputation
This company develops a bad reputation over time as online reviews, BBB complaints and reports published by the media start to surface. Charges may be laid under the Consumers Protection Act, by the CRTC or other regulators or by a homeowner bringing a class action lawsuit forward.
Reports in the media
The media continues to publish consumer complaints against the practices of these companies year after year:
- 2009 Ministry of Government and Consumer Services begins getting complaints about OEG.
- 2012 OEG customer in Orangeville finds he has an $11,000 lien on his home while trying to sell their home. A 76-year old customer in Guelph was sold a furnace and AC contract for $160 per month for 15 years, or $28,000. Home Trust put a lien on the equipment for $14,000.
- 2013 OEG door-to-door salesperson sold a 78-year old cognitively impaired man 15-year contracts for a furnace and air conditioner and placed a lien on his home. The man died 15 months later and after the family stopped making payments, OEG billed them for $54,386.17.
- 2014 OEG door-to-door salesperson sold an 82-year old man in Etobicoke a furnace contract and placed a lien on his home.
- 2016 OEG sells Windsor senior 15-year contract at $49.99 per month and an annual increase of up to 3.8%.
- 2016 Ontario Safety Standards sold two Ottawa women 10-year contracts for water softeners door-to-door that would see them pay $6,000 over its course for a unit valued at $1,800. After the story was published, one of the women had the water softener removed at no charge.
- 2016 Consumer Choice Comfort Service did an in-house demonstration showing purporting to show that Ottawa’s water was contaminated, which convinced an Ottawa woman to buy a 10-year, $50 per month contract for a water softener. A lien was placed on her home for the full value of the contract – $6,000. In small claims court, the judge ruled that “the sale was entered into as a result of unconscionable representations by the (Comfort Service) representative to the effect that (Miller) was drinking dirty water from the City of Ottawa” and the contract is of no force due to breach of the Consumer Protection Act.
- 2016 SGHS installations in Saskatchewan are poorly done, without permits and cause damage
- 2017 Nationwide Home Comfort tells a Toronto senior her drinking water wasn’t fit for consumption, sells her a water filter system for $56.50 a month plus HST for 10 years, a total obligation of $7,661.40.
- 2019 OGS sold a Mississauga couple a 12-year contract amounting to $40,000 for a new furnace, air conditioner and HEPA filter, promising big savings and rebates from that didn’t come to fruition. A lien was placed on their home.
- 2020 SGHS signed a BC customer to a 6-year, $6,500 rental contract for a furnace, quoting buyout costs of $10,633.73 and $18,000 in separate instances.
- 2020 SGHS is banned from engaging in door-to-door sales in B.C. for one year and have ordered them to pay a $8,000 penalty after an investigation by Consumer Protection B.C.
- 2021 OGS sold an Orillia resident a 12-year contract for a tankless water heater and placed a lien on his home after he responded to a Facebook ad.
- 2022 OGS salesperson is caught on hidden camera by CBC Marketplace telling the homeowner incorrect information to push them into a water heater.
Charges are laid under the Consumers Protection Act
The Ministry of Government & Consumer Services files charges against the companies after investigating complaints reported by consumers.
2013 OCHS and their directors (President Vitali Godonooga, CEO Vasili Tatarinov) received 63 charges under the Consumer Protection Act and had been signing customers up for water softeners, air filtration and other equipment via door-to-door sales.
2016 SGHS was cited for “engaging in deceptive acts or practices” and fined $1,200 by Consumer Protection B.C.
2016 OEG is charged with 142 counts of violating the Consumer Protection Act following a provincial investigation. These charges were dropped in 2017 when OEG agreed to settle each consumer complaint. After the charges were laid, Home Trust announced on Sept. 7, 2016, that they provided 90-days notice that it will no longer accept any rental agreements from OEG under the income-stream purchase agreement.
“This is definitely a situation that we take very seriously and that’s why we are acting,” Ministry of Government and Consumer Services spokeswoman Anne-Marie Flanagan. When asked why it took so long for the province to act, Flanagan said the ministry needed to “take time” to do the investigation and get it right. She did not say when investigators began looking into the reports about the firm.
2019 OSS receives 112 charges for allegedly making false, misleading, or deceptive representations to consumers in their homes, using a contract that did not comply with the Consumer Protection Act and failing to provide refunds when required.
2019 OCHS committed more than a million violations of the Unsolicited Telecommunications Rules in a 2 month period between December 2016 and February 2017, making over 96,000 unsolicited calls to Canadians whose numbers were on the National Do Not Call List (DNCL), some of which were outside of the permitted hours. They were penalized $194,330.74.
Small claims court
Homeowners who have taken companies to small claims court have had success, with the courts ruling in favor of consumers over the rental companies. Here are a few examples:
- Balagula v Ontario Consumers Home Services, 2018 – a homeowner who was paying $49.99 per month for a carbon filter and $79.99 per month for an air conditioner on a 10 year contract paid $17,334.09 to buy them out during the sale of his home. He successfully sued OCHS for the buyout amount, as the judge ruled the contract had onerous terms, not those a consumer might reasonably expect, and the company did not sufficiently bring them to the customer’s attention.
- Skymark Finance Corporation v Toraman, 2020 – the company sued an immigrant couple with limited facilities in English for rental arrears of $8,648.48 plus interest for a water filter with a fair retail value of $1,200. The judge ruled the contract unenforceable due to the false, misleading or deceptive representations and unconscionable representations by the door-to-door salesperson.
- Utilebill Credit Corp. v Apex Home Services Inc, 2021 – a homeowner who signed up for a 10-year, $20,000 contract for a furnace and air conditioner wrote her understanding of its contents on the face of the form: “Total $7,335.00 0% int.” She was awarded $10,000.00 in punitive damages as the court found there had been a fraud in her home.
Class action lawsuits
- Ontario Energy Group agreed to pay nearly $15 million to settle a class action lawsuit claiming it violated Canadian law with deceptive leases sold to individuals between May 1, 2012, and Dec. 31, 2016. Home Trust Company is alleged to have purchased an interest in the lease agreements, collected money from Class Members under the lease agreements, and to have registered “liens” against Class Members’ homes.
- Crown Crest Capital (SGHS) for allegedly breaching consumer protection law in registering security interests against consumers’ home title.
Step 9. Get charges dropped after resolving some complaints
The sales company agrees to resolves the complaints of the subset of their customer base that were the basis of the ministry’s charges in order to get the charges withdrawn – attempting to stay afloat and extend their run.
2013 63 charges against OCHS were dropped by the ministry as they made a “number of significant changes,” including adjusting policy and procedures, terminating employees and other independent contractors who were the source of the problems, starting to train staff in the Ontario Consumer Protection Act and promising to take “swift action” if there are improper actions by employees in the future.
The ministry was content that the company’s efforts brought them in compliance with the Consumer Protection Act.
2016 142 charges against OEG were dropped by the ministry as OEG agreed to settle the cases of each of the 20 complainants that formed the basis of the charges before the court.
“The ministry established that the Ontario Energy Group will be addressing the complaints directly with the consumers by way of settlement and compensation,” “This is a positive outcome for the consumers involved.” – ministry spokesperson Sue Carroll
Similar to the banning of door-to-door sales, the charges laid by the Ministry of Government and Consumer Services under the Consumer Protection Act have done little to stop the infractions from happening again and again.
However, this doesn’t do anything to resolve the situations of customers who continue to pay exorbitant fees and have not yet formally complained, bought out or terminated their agreements.
In the case of the OEG Class Action Settlement, customers who had already exited their lease agreements and no longer rented from OEG were offered a single cash payment to cover a portion of the rental payments and termination fees. Customers who continued to rent were also offered a single cash payment, a reduction in the annual increases allowed and a cheaper, transparent buyout schedule (Schedule A).
The settlement allowed for only 225 lease agreements to be fully cancelled, with the amounts owing forgiven and equipment gifted to the customer. The remaining contracts/loans were acquired by Simply Group in September 2020 for $71 million.
Step 10. Shut down sales company
The pressure eventually mounts and the sales company closes down or files for bankruptcy protection, either voluntarily or by force. Websites are shut down, phone numbers go out of service, and emails bounce back.
- Eco Energy Home Services Inc. is declared bankrupt April 2019.
- Ontario Consumers Home Services, Viva Financial Corporation and Consumers Choice Comfort Services were deemed bankrupt October 1, 2020.
- Ontario Safety Standards, Ontario Stars and Canadian Safety Standards’ websites went offline in 2018, 2018, and 2019, respectively.
However, this is not the end of their story.
Step 11. Sit back and collect debts
The consumers who do not buy out the contract, or successfully have it nulled by reporting the company to the media or taking the company to court, continue to pay monthly throughout and after the bankruptcy or closing process.
A sister corporation or third-party holding/asset management company swoops in and buys the remaining portfolio of still-valid contracts (that they refer to as “assets”) and start collecting the monthly payments – providing the service of “financing”, aka loan management and debt collecting.
As a separate entity, the financing company can say it had nothing to do with how the contracts were signed.
Simply Group is the latest company to vacuum up other company’s rental portfolios, acquiring:
- Sandpiper Energy Solutions (24,000 customers) in 2016
- Ontario Consumers Home Service, Simply Comfort Home Services (~53,000 customers) in 2017
- Nationwide Home Comfort in 2018
- Green Planet Home Services for a total of $27.5 million in 2017 and 2020
- Home Capital Group’s “point-of-sale retail lending portfolio” (presumably in part the remnants of Ontario Energy Group) for $71 million in 2020
- EcoHome Financial Inc. (Eco Energy Home Services Inc.) in 2020
They now boast having assets under management of over $3 billion.
Step 12. Rinse and repeat
The next batch of companies and “entrepreneurs” with a willingness to cut corners in order to make money eventually rise and start the process anew.
From my research, it seems that the founders who start their own direct marketing HVAC companies do so after having worked at one of the previous iteration’s companies as a sales associate or marketing lead.
How to get out of a home services contract or lien?
Here are your rights under the Consumer Protection Act when signing or cancelling a contract in Ontario.
If you have a rental contract through one of these companies, you have a few options:
- 10 day cooling off period – You can cancel a contract for any reason within 10 days of receiving a written copy of the agreement. To request a cancellation, send the company a message in writing either by email or by registered mail so that you have a record of when you sent it and have a record of the communication. Keep a copy of your letter.
- False/misleading representations – If the business has represented their goods or services in a false, misleading or deceptive way, you can cancel the contract and get a full refund within 1 year by sending a written request to the business.
You can also report instances of misleading or deceptive marketing practices to the Competition Bureau using the online complaint form or by telephone at 1-800-348-5358.
- Posing as a government representative – If the salesperson falsely posed as a representative of a legitimate corporation such as Enbridge or Google or a government entity or program such as the Ontario Energy Board or Green Homes Grant, report it to the Canadian Anti-Fraud Centre online, at 1-855-495-8501 or contact local police.
- Missing contract information – If the contract was from a salesperson either at your door or in your home and does not include specific information about the goods or service and your rights as a consumer (see Requirements for Direct Agreements), you can cancel the contract within 1 year of entering into the agreement.
- Failure to refund – If the business fails to refund you, you’re outside the 1 year timeframe, or you think the company has broken the law in the Consumer Protection Act, file a complaint with the Ministry of Government and Consumer Services. Charges commonly laid against these kinds of companies include:
- Unfair Practice – False Misleading
- Fail to Refund
- Direct Agreement – Fail to Deliver Valid Contract
- Door-to-door selling (banned under section 43.1 of the Consumer Protection Act)
- Leave an honest review on Trustpilot. Other customers have reported having their rebate and contract buyout issues resolved after leaving 1 star reviews there.
- Failure to provide rebate/buyout/device as promised – Report this fraud to the Canadian Anti-Fraud Centre
- Contact the media (eg. CBC Go Public) and ask them to publish your story. Customers who have had their stories published usually have their contract concerns resolved.
- Have a lawyer do a title check to see if a company has registered any illegal liens against your property: https://www.ontariohvacscam.com
- Buyout the contract
Check your home’s Agreement and Purchase of Sale
See if the unit is listed under Rental Items – for example “hot water heater”. Our purchase agreement included it:
This means that you have agreed to assume the contract notwithstanding that you never saw or signed it. The law more or less says that if you had had concerns, you could have made the Agreement conditional on reviewing the rental agreement.
If the water heater is not listed under rental items, the real estate agent made a mistake and you can demand that the seller buy out the contract.
Check if there is a lien on your property
A lien is a legal claim that’s attached to your property title that represents an unpaid debt. It can be filed without notifying the homeowner.
Use Ontario Land Registry Access look up the Land Registry Office for your area and order a copy of your Parcel Register which costs $30.95 plus HST and lists all the legal documents registered for a property.
“NO SEC INTERST” means “Notice of Security Interest” as the “NO” is short for “Notice” and does not mean that the property is free of security interests.
You have to enter your name in the “Requested by” box. Each document in the Property Parcel has a Registration Number, including liens. Go to Documents > Instruments, Plans and Evidence and enter the Registration Number to get the details. The documents cost $3 plus HST.
Check if the lien is illegal
Dennis G. Crawford‘s OntarioHVACscam.com offers a free title check for homeowners in Ontario to find out if any illegal liens have been registered against your property. They do not charge a fee unless we succeed in getting a lien removed.
How to file a complaint
If you feel that your rental company has taken part in deceptive marketing practices or abuse of dominant position, you can submit a complaint to the Competition Bureau here.
If you think the business has broken laws under the Consumer Protection Act, you can file a complaint to Consumer Protection Ontario about a contract signed in your home
You can also leave a review here on Cansumer:
- How to recognize energy scams – Natural Resources Canada
- The Ontario HVAC Rental Scam – Ontario Bar Association
- Door-to-door sales and home service contracts – Consumer Protection Ontario
- Enbridge’s regulatory filing to OEB regarding OBA Program
Over to you
We’re interested to know – are you currently renting a home appliance from one of these companies? Has one tried to sell you a contract before? Let us know about your experience by leaving a comment below!
Hi Alex, I am in the throws of disputes with Crown Crest Capital much along the lines of your excellent report. Sincere thanks and Kudos! In addition to the facts outlined by you, I am focusing on; 1. CCC’s right to register a NOSI against our property which is co-owned with my spouse as a “joint tenant” when only I signed the Agreement. (I’m told by 2 lawyers that a single joint tenant cannot encumber a property owned by joint tenants), and 2. CCC’s calculation of the APR. Clause 8 of their Agreement states that the APR will remain at 7.99 % throughout the term, subject to Clause 9 which states that payments will increase annually by 3.5%. I argue that this is deceptive in that they should have also indicated an APR for the escalated payments. I am conducting a detailed analysis on Excel. Also, I’m trying to decode the CPA and its Regs regarding my circumstances – I leased my furnace on December 8, 2017 for a 15 year term, just before the amended legislation. Its tough to do so as you may well know. Should you be interested in comparing notes, please don’t hesitate to call me at [phone removed for privacy] or my email.
Hello and thanks. I’ve been scammed. But for now I have a single question. The lessor registered a NOSI on my house which is owned by my wife and me as joint tenants. The contract enabling the registration was signed by me and not my wife. I would think the registration of the NOSI is thus illegal and unenforceable because it encumbers my wife’s interest as joint tenant without her permission. This may have been the case with some others as well. Do we have a basis for compelling the lessor to remove its lien?