Does your water heater need to be replaced?
November 19 2009 by Ellen Roseman
You have a rented water heater and you pay monthly fees on your gas bill. But Ontario’s gas utilities are no longer in the water heater rental business. Enbridge sold its portfolio to Direct Energy and Union Gas sold to Reliance Home Comfort.
Recently, new competitors are trying to grab the business away. The two legacy firms are losing market share and they’re not happy.
Direct Energy, in particular, has a strong motive to cover its assets. In 2002, it set up the Consumers’ Waterheater Income Fund, which gives investors 65 per cent of the rental revenues, while Direct Energy gets the remaining 35 per cent for life-cycle support.
“The Fund generates very stable cash flow, making it ideally suited to the income trust structure,” it says. But the share price has slipped to $3.66 from a 52-week high of $10.30.
In its latest quarterly report, the fund explains what went wrong:
The attrition rate of 3.5% increased significantly from 0.9% in the prior year due to intense competition.
The Fund and Direct Energy Marketing Limited (”DE”) have initiated a range of marketing programs aimed at informing our customer base and reducing future attrition levels.
Direct Energy has a new website, warning customers about misrepresentation by rival water heater sellers .
It uses the same slogan I use (”straight talk”) and has bought the rights to use several of my columns there.
Reliance Home Comfort has set up a new consumer website as well, and posted my latest column there.
I’m not thrilled to be a poster child for these campaigns, but I do hate the way that some rivals misrepresent themselves to make a sale and lock customers into long-term contracts with stiff exit fees. The tactic of installing new water heaters during the 10-day cooling off period also makes me crazy.
As usual, readers happily shared their views about the water heater wars and other issues involving Direct Energy, Reliance and Enbridge. Some comments appear below.
Several people asked me to explain the pros and cons of renting vs. buying your own water heater. I’m a renter (just lazy, I guess) and I’d like to hear from those who have bought their own tanks. As for tankless (another question asked by a few readers), my thumb’s down for now.
Cynthia
Nov 19 2009
I know at my last place the tank was a rental. It bottomed out and had to be replaced. I called right away. We had to wait 2 days for a replacement.
I think in today’s day and age, hot water is a must. Glad this current rental is from our local hydro company. Knock on wood, it’s still good.
RZ
Nov 19 2009
Thank-you, thank-you, thank-you for your informative article. I happened to be at home sick in bed, when two representatives of “National Home Services” rang our front door at 8:30 PM (Wednesday night).
They explained that a notice had been sent out in July and they were here to check our hot water tank. My spouse allowed them in and told them that we had just moved from Winnipeg in September, and took possession of our new home. We were unaware of any previous notices.
The two representatives were very polite, showed their credentials and explained the procedure to my spouse. After they left, I asked my spouse what was happening. She told me that National Home Services was going to change our hot water tank for a “nominal” rental fee of $34.95 per month/plus GST.
There was something that just didn’t seem right, since after they left, the representatives wanted my spouse to call a toll-free telephone number to “validate” the account.
I was sick in bed upstairs while this was transpiring, but at 10 PM, I was feeling better and began reading my Toronto Star. I saw your article and suddenly everything came together.
Being from Manitoba, we ARE NOT subjected to this type of trickster games. Our natural gas, and hot water tank rentals, are handled by the Centra Gas, which is a very reputable and customer-service oriented utility company.
My spouse then went on the internet and read the warnings of these “hidden” contracts and additional fees.
At NO TIME did the National Home Services rep, Pablo, inform my spouse that this would be a 15 year contract, with penalty fees, should we sell our home or opt out of the contract.
We were also of the impression that this was a “mandatory hot water check” due to safety reasons. Since we took possession of our home in September and Pablo said that notices were sent out in July, we felt compelled to allow them into our home and give access to our hot water tank.
We promptly cancelled any further services from National Home Services, so your article saved us big time. My subscription to the Toronto Star is the best investment I have made thus far in Toronto.
(I’d offer to hug you, but I am getting over the flu and I wouldn’t want to infect you. Perhaps I should have hugged the representatives from National Home Services. I now realize that scammers are amongst us. Even with company identification cards!!!!!!)
GB
Nov 19 2009
Hi Ellen, appreciate your article on the door to door sales for water heaters - it’s important for people to be aware of this.
One thing that you mentioned that Reliance Energy said on their website:
“Telling you that your water heater is inefficient if over a certain age, when it can actually work for years without accumulating rust buildup.”
This is perhaps the only thing the door to door salespeople might be telling the truth about.
According to a City of Toronto Employee - Rob McMonagle in the energy efficiency office - a study by either Enbridge or Direct Energy showed a dramatic drop in efficiency of tank water heaters within a very short period of time (like 12-24 months).
Natural Resources Canada suggests the realistic lifespan of one of these units is about 10 years. Many out in the field are far older than that.
The established players are also in the business of keeping people in captive contracts (they tried to charge me to remove a water tank one time, but I had never signed a contract with them).
Especially those with old assets want them out there in the field far longer than they should be because:
1 - They keep getting rental revenue without expending capital.
and 2 - Inefficient gas appliances may mean increased revenue for them (if they have the gas supply contract).
RH
Nov 19 2009
I recently chose to purchase and maintain my own water heater. I’m lucky since I have a few friends in the business, so it won’t cost me quite as much for maintenance and installation.
However, I think there is a first-blood drawn by the big guys that is causing the aggressive tactics you are reporting on. Even the legacy companies are now contracting end-users for 15 years.
That’s huge and works to the first companies’ advantage in locking customers from competition, almost to the point where it should not be allowed — given that a tank is paid for in about 5-7 years and maintenance covered with the rental fees.
I was in my eleventh year of a new home (and no contract). The unit needed replacing and the current rental company, billed through Enbridge, was enthusiastic about replacing it at no charge under our current rental plan.
Luckily, I was chatting with one of my friends in the business who mentioned you might not want to do that unless you are OK with signing a 15 year deal.
Direct Energy didn’t mention that to me, but apparently if you ask they will tell you, yes, they will come out to replace it and have you sign a contract going forward.
TS
Nov 19 2009
Two days ago, a young man and woman came to our house in Whitby. They said they were there to arrange a date for the free replacement of my rental water heater in order to save me money, because the new tank will consume less energy.
I suspected they were attempting to manipulate me into replacing my tank, even though it has provided good service and is not faulty.
When I told them I was going to call my provider, I was told my provider will say the heater is working OK and needs no replacement.
At this point, I told them I will not accept their urging to install a new tank and ended their sales pitch immediately.
Your article has done a commendable service in explaining the situation to the public.
RO
Nov 19 2009
I would like to tell you my experiences with Direct Energy.
In July of this year, my next door neighbour asked me to look at her water heater. The safety valve was dripping.
This lady is 80 years old and recently widowed.
I told her to call Direct Energy because it is a rental. I was away when someone from Direct Energy showed up and told her it was 15 years old and not worth fixing — and the piping for the venting was out of code.
She was charged $178 to bring the venting up to code and install a new rental tank.
When I got back from my trip, I called Direct for my neighbour. Their attitude was too bad. She signed a contract.
They promised a return phone call from a supervisor. I was hoping they would at least waive the money for the venting.
I asked them if I would be charged the same amount if my tank gave me problems. I was told they could lock off my tank if the venting was not up to new code, even if my tank was not leaking.
Yes, Direct Energy has been phoning and warning all of its customers of other companies. I received a call.
The other concern we have are the bills for rental of the tanks. My rental is $13 a month and my neighbour pays $20 a month. We were told one is a regular tank (mine) and hers is a power tank to save energy. How much is saved?
National Home Services recently came around. The offer was explained to me in writing: Installation free and up to code. I was told it was a 15 year contract with two months free.
The salesman was very polite and not pushy. He did not ask to see my bill and left me a phone number to call.
I checked both companies with The Better Business Bureau.
National Home Service had about nine complaints in the last three years. Direct Energy had 450 complaints in the same time period.
The customer service people at Direct Energy were very hard to get. I was on hold a long time. I was told twice that someone would phone me back. I’m still waiting.
DC
Nov 19 2009
These guys can be pretty pushy. If we had taken one of their 5-year fixed-rate gas contracts, we’d be paying three times the market rate.
If you crunch the numbers on water heaters, it’s better to buy than rent one.
You can pay about $450-$500 installed for a 40-gallon one or pay $10-$12 a month to rent one that lasts 15-20 years. You wind up paying for it four or five times over.
JF
Nov 19 2009
I can’t think of any other thing I could rent where they can jack up the cost of a continuous rental “any time they like” while the value of the asset declines.
This is a case of sharks complaining about sharks.
At least the ridiculous fee to remove a rental water heater has been struck down.
PS
Nov 19 2009
I was one of the dummies who actually let the person into my house because they were so convincing.
This is a pretty scary situation and I am sure that they have nabbed many people like me.
The light bulb went off when I took a look at the contract and saw that they did not represent Direct Energy when they said that they did.
I immediately called the police, the company and Direct Energy. What concerns me are all of the people that they can scam whose light bulb does not go off when they see the contract.
I really hope that they do something about this.
ME
Nov 19 2009
I want to thank you very much for your timely article in the Wednesday Star. I read your warning about the companies doing this and their tactics.
About 5:30 last evening, a man showed up at my door and started asking me if he could come in to check my water heater, in case it was not the newest high-efficiency model. He spoke so fast I couldn’t follow him.
He didn’t give me the company name, until I asked him. He was with LivClean. He was extremely pushy, and wanted in quickly, saying “are my shoes ok?”…. and reaching for the door handle.
I was quick to tell him that my water tank was of the highest efficiency, only days old. He replied, “good to know,” and left.
If this guy went to my older neighbours, his fast-talk might just get him in their door. Instead of joking about my tank, I should have told him that I just read your article on what “fraudsters” they are!! And to get LOST.
CM
Nov 19 2009
You should let Reliance Home Comfort know their salespeople are doing exactly what the rest are doing.
I had a trickster visit my home a couple of weeks ago using the same line — “the manufacturer wants to replace the water heater, I need to check the serial number on it”.
When I asked for ID and a business card, he just pulls out his binder and keeps talking.
I asked for his number so I could “think about it” and he gave me a brochure from Reliance Home Comfort and the telephone number 647-618-6767. Been meaning to call Reliance but never got around to it.
You might just want to clarify with them that their salespeople are setting out to use the same practice and are trying to switch Direct Energy clients — but I’m sure they already know this, probably part of their training.
————————————————————
Jennifer Garland, Reliance spokeswoman:
This is helpful feedback. Thank you for forwarding.
DDV
Nov 19 2009
The gas service at my home was disconnected on Nov. 3. Admittedly, it was not the first time; however, there are mitigating, unforeseen circumstances in this instance.
My bank account’s client card had been “compromised” on Oct. 30, and $800 was fraudulently removed from my account. [By the way, I do not recall having seen any sort of “Final Notice” from Enbridge prior to the disconnection.]
When I called to explain my predicament to Enbridge, they informed me that not only would I have to pay the $632.59 outstanding, but pay a $400 “security deposit” as well. And to re-connect my gas, I would have to pay an additional $73 “reconnection fee” (plus the Western Union service fee of $15).
After pleading with the agent taking my call, I was able to speak to a Supervisor (Linda). She said my service could be re-connected the following day if I made a payment of $541.42 (covering $467.92 of the outstanding balance plus the $73 reconnection fee); and that the $400 security deposit must be charged and paid in 2 weeks.
As I explained my banking situation and pleaded to have the $400 waived, no accommodation was offered at all.
Fortunately, I was able to withdraw sufficient funds to pay the agreed-upon $541.42 the evening of Nov. 3, and our gas service was re-connected on the morning of the 4th.
Not only was I subjected to the inconvenience of a service disconnection after Nov. 1st (when this is supposed to stop for the winter), but I still have no relief from the $400 security deposit.
I want Enbridge to waive the albatross and reimburse me for the reconnection fee and Western Union fee ($73 + $15 = $88), and would appreciate your assistance in this regard.
BW
Nov 19 2009
I’ve been trying to resolve an issue with Enbridge Gas since July. I have spoken to about 7 or 8 people and they’re all very sympathetic, but no one seems able to make progress. It’s really pretty simple.
I was an Enbridge customer for 15 years, but when I moved in June 2009, Enbridge charged me a $250 security deposit on my account for the new address.
I called them in July. They agreed that because I was a long-standing customer, this was inappropriate and they would credit the $250 back to my account.
Despite half a dozen phone calls since then, including a discussion with a supervisor, the $250 has not been credited back.
Furthermore, Enbridge has been taking my monthly gas payments and applying them against this deposit!!
The best they can tell me is that there has been a system change-over and that my request is “in progress”.
Every time I speak with them, I ask them when it will be resolved and the dates keep getting farther and farther out.
Meanwhile, the amounts that Enbridge tells me I owe them continue to climb: As of today, we’re up to over $300.
Today was the last straw — I asked the Enbridge staffer to give me the contact information for the company Ombudsman; she was unable to and suggested I look the number up in the telephone book!!!!!
DB
Nov 19 2009
Attention: Peter Love, Chief Energy Conservation Officer
c.c. Ellen Roseman, Toronto Star
Dear Sir:
I am writing to voice my complaint regarding the lack of critical information available to consumers regarding the Cool Energy Savings Program, presently in effect for buyers of energy saving products.
I purchased an older home in July of this year and while planning for some renovations, I scheduled an EcoEnergy audit. I also budgeted for the purchase of a new hi-eff furnace and high end air conditioner to replace the 30 year old HVAC system that was in the house when I bought it.
I was not aware until recently that the $525 rebate available from the Ontario Power Authority for a/c - HVAC systems that met certain criteria was only given to consumers who purchased their units from a “participating contractor.”
Unfortunately, I had assumed that this rebate would be sent to me automatically after completing my final EcoEnergy audit.
It was not until I read that this rebate incentive was soon to end (and not being ready for my final EcoEnergy audit) that I went online to the OPA website and discovered that the consumer’s installer had to be “registered with the program” in order for the rebate to be given.
I immediately contacted my contractor, Larry’s Air Care, in Whitby, Ont., to ask if he was a participating contractor as the program required. He told me he had registered with the OPA 2-1/2 years ago and would look into the matter with the OPA.
I spoke to my contractor today and was told that he is not registered in this program. Although he registered a while ago, he was not sent any renewal notices by the OPA.
He said I would get a rebate from the EcoEnergy program (which I already knew), but I was “out of luck” with the OPA rebate. He was also very adamant in pointing out that “I never said you would get a rebate from the OPA.”
It is all very confusing. I was pretty sure that I was fairly well clued in to all the rebates available to homeowners, but somewhere along the way I seemed to have dropped the ball on this one.
I feel this was primarily the fault of the OPA for not making the program specifics and requirements more widely advertised.
Had I known, I would have requested some form of certificate or verification from my installer to ensure that he was actually enrolled in this program. But why would I when I was completely unaware at the time that this was even a requirement?
Why are some contractors in the program and others not in the program? Perhaps it should be mandatory for contractors to be more up-front to their customers about this.
Certainly I feel there is a lack of consumer education somewhere along the line and I am not going to be the only one surprised and disappointed by this turn of events.
I certainly knew about the OPA rebate - just not the fact that some installers/contractors were “registered” with the program and some were not.
Had I known I would have made sure to only buy from a contractor who was in the program and was able to offer this rebate to their customers.
Why was I not aware of this little “minor technicality” that is now going to cost me $525?
I am sending a copy of this email to Ellen Roseman at the Toronto Star because I am pretty darn sure that I am not going to be the only consumer who is surprised by this “participating” contractor requirement.
Since I decided to go with the more expensive model of a/c anticipating that this rebate would offset some of the cost, it is a bitter disappointment.
I just feel that the advertising of this program could have and should have been clearer as to the program’s specific requirements.
Bylo
Nov 20 2009
> Consumers’ Waterheater Income Fund, which gives investors 65 per cent of the rental revenues
> I’m a renter (just lazy, I guess) and I’d like to hear from those who have bought their own tanks.
Do the arithmetic and you’ll soon see why the income trust can be so lucrative for investors. At $15/month to rent you pay $180 a year. If you buy instead your break-even point should be about 4 years.
All hot water heaters come with at least a 6 year warranty. In practice they last at least twice that long. But even if they die after 6, you’ll be way ahead.
Renting is like buying a very expensive extended warranty and then paying for it by credit card. Would you recommend that to your readers? I didn’t think so
PG
Nov 20 2009
Ellen: National Home Services showed up in our neighbourhood the day of your column. My wife says I was “rude” at the door. So I’d like to apologize and invite them back so I can do it again!!!
And oh yes, the guy started out with the “our brochure in your Enbridge bill some months ago” bit. Don’t know what he was supposed to say next because that’s when I asked him to leave.
In any event, we weren’t really candidates as we have owned our tank for over 7 years! It’s a 50 gal. high efficiency power vent model.
On the bad side, it has had 2 owner-pay service calls. Once for a new igniter ($100 service + $60 part) and two years ago when it stopped working and we had to pay another $100 service to have the tech simply plug it in (after I had repeatedly done this) and it has worked ever since. Go figure!
Both service call appointments were arranged with Direct Energy and they were here within one day the first time and 2 days the second. On the plus side, despite these two calls, we have still saved money.
Here’s what a person looking at buying/renting is faced with today:
New GE tank installed via say Home Depot, $1100 incl taxes
(1 yr parts/labour warranty, additional 5 yr warranty parts).
Rental from Direct Energy $25/mo incl taxes (bumper to bumper warranty forever but rate can increase in the future).
So the math says your basic breakeven point is at the 4 year mark. After that, it’s the luck of your owned tank.
Direct Energy’s website quotes the horrific price of new parts (e.g. the $672 ventor motor or the $697 gas valve) if you own a tank and need repairs. Don’t know where they’re getting these prices from, but I suspect they include one HUGE markup for them.
Note the price of an INSTALLED new unit above! The website also talks about your time and peace of mind. And that’s the real issue!!
When deciding on owning/renting ask yourself:
1) In the worse case scenario, am I prepared to go without hot water for say two days? (Note that HD used to install same day if booked before noon but unsure what they do now.)
2) How important is peace of mind/extended warranty? When you bought your last car, did you buy an extended warranty? If not, why would you want one for a much simpler water heater?
My wife was offered a $1.50 extended warranty on a $7 audio cable yesterday at The Source. The only thing she could see going for it was it was an additional Source of revenue, or as some would say, a transfer of wealth from her to them!!
3) Don’t count on getting service priority just because you rent - even DE doesn’t seem to bring this up on the website.
So in summary, yes, I’m biased. We’re in the position now that if something major happens, we’ll just get a new unit.
If you can afford the initial all-at-once capital outlay, buying just seems to make sense. But to each his own.
After all, there’s that Income Fund to keep going!!!
PH
Nov 20 2009
It was interesting to read your column about door-to-door water heater salesmen.
Normally I shun anyone who solicits in this manner. However, there is another side to this story.
We have a rental water heater in our 22 year old house. Our neighbours complained about their water heater a couple of years ago and were able to get a new heater.
Our hot water ran brown at times, so we were also unhappy. When the National Home Services salesman knocked on our door, we decided to hear him out.
We heard his sales pitch, which was DEFINITELY low-key. During his presentation, he did not ask to see any bills. We told the salesman we were not prepared to commit at that time and would like to give Direct Energy the opportunity to counter-bid. We parted on very good terms.
We promptly called Direct Energy and explained the offer, saying we wished to replace our 21-year-old water heater due to its sometime brown water problems.
Their customer service appeared totally disinterested and would not even agree to send a technician out to look at our old water heater.
The contrast between the two companies was extraordinary.
We phoned National Home Services and accepted their offer. The replacement was done very smoothly and the old unit was returned by National to Direct Energy.
Although we pay about $3 more per month, the service we receive is far superior to the non-service from Direct Energy. National will come out and inspect the water heater once a year and will replace it (I can’t remember if it was on demand or after a few years).
If Direct Energy wishes to be competitive, they need to pull up their socks and provide better customer service.
Kathryn
Nov 20 2009
I rented my hot water heater from Toronto Hydro until Toronto Hydro sold the business to Direct Energy.
The service deteriorated to the point where I was considering a change. The original rental was ‘off the grid’ and I had to have it placed on the grid.
The contractor that Toronto Hydro recommended was extremely unhelpful, so I looked into changing to gas.
Direct Energy put most of their energy into upselling. It would have involved my having to take two [full] days off work for installation (one to assess, but they could not even give a half-day window and did not work evenings). I was not prepared to do that.
Then, they gave me an inflated price to purchase a six year old water heater. Enough.
I bought a new gas water heater & had it installed on a weekend. I am happy with my decision.
From this experience, I learned not to deal with any energy company, if it can be avoided.
KP
Nov 23 2009
I opened the door to one of these tricksters on Nov. 5. His patter included pretty well all the claims that you listed.
He led us to believe that Direct Energy was getting out of the water heater rental business and had sold their contracts to his company.
He needed to look at the water heater for some not very clearly stated reason.
His company would be installing a brand-new heater absolutely free of charge and he needed to set up a convenient time as early as possible.
The new heater rental charge would be a little higher than the old one, but the heater would be a much better one.
We did let him see the heater and we did set a time and date for the new heater to be installed — the following Monday between 8 a.m. and noon.
Over the weekend, however, we thought things over, and on Sunday called the number on the order form we had signed and left a message asking if we could postpone the new installation as we would not be home.
On the Monday morning, I called Direct Energy to ask if the information we had been given was true. Needless to say they were not happy and assured us that they were still very much in the Water Heater Rental business, they still wanted our business and they would never sell a contract without first informing the customer.
I then called the other company — RelianceHome Comfort –cancelled our order and let them know what had happened. They professed shock and dismay, as they claimed to operate in a very open and honest manner, and their website warning seems to support this claim.
Whether we were the victims of an unscrupulous company representative operating by his own rules, or whether all their representatives operate in this way, I cannot say.
The real impact of your article for me was the fact that I had been the victim of one of the two “heroes” of your story.
I could not help but think of the kettle calling the pot black when I read “Direct Energy and Reliance Home Comfort …… are accusing their new rivals of lying and misrepresentation”.
second opinion mike
Nov 23 2009
Seems like renting a hot water tank at $20 a month for 15 years is a little expensive
The present value of the required payments at a discount rate slightly above planned inflation suggests the water tank will cost almost $2,600.
Based upon your reader feedback, you can buy one and get a great maintenance agreement for less than that.
BW
Nov 24 2009
I’ve been trying to resolve an issue with Enbridge Gas since July. I have spoken with 7 or 8 people and they’re all very sympathetic but no one seems able to make progress. It’s really pretty simple.
I was an Enbridge customer for 15 years, but when I moved in June 2009, Enbridge charged me a $250 security deposit on my account for the new address.
I called them in July and they agreed that because I was a long-standing customer, this was inappropriate. They agreed to credit the $250 back to my account.
The $250 has not been credited back. Furthermore, Enbridge has been taking my monthly gas payments and applying them against this deposit!!
They tell me there has been a system change-over and my request is “in progress”. Every time I speak with them, I ask them when it will be resolved and the dates keep getting farther and farther out.
Meanwhile, the amounts that Enbridge tells me I owe them continue to climb: as of today, we’re up to over $300.
Today was the last straw — I asked the Enbridge staffer to give me the contact information for the company Ombudsman; she was unable to and suggested I look the number up in the telephone book!!!!!
If you have any suggestions for me as to who to contact, or even if you could make a phone call on my behalf, I would be really, really grateful!
Thank you SO MUCH in advance for any advice you can provide or arm-twisting you can do — I already told Enbridge that I was fed up with them and would be going to the newspaper with this.
————————————————————
Debbie Boukydis, Enbridge spokeswoman:
We have called BW and left a message to let her know that we have removed the $250 security deposit from her account.
Yes, BW was told to look up the Ombudsman’s number in the phone book. The customer service rep was trying very hard and was quite flustered about finding the telephone number and then resorted to asking her to look up the number.
We contacted the Manager of Training about the CSR’s response. The CSR is new and has been taken off Enbridge calls for follow up training.
We have sent BW a letter of apology and a $50 gift certificate to compensate her for her frustration.
Jenn
Dec 3 2009
Would like to say that Ellen now has a facebook group come join
http://www.facebook.com/home.php?/group.php?gid=185665570255&ref=mf
Adrian
Dec 6 2009
This is exactly what Direct Energy (DE) was doing when the water heaters were owned by Enbridge …they use to send aggressive door to door guys to get you to switch from Enbridge to them ( DE ) !!!
Now that some other company is doing the same to them and they are complaining all of a sudden..go figure .
JRW
Dec 12 2009
On the matter of lease vs purchase, we lease principally because the water in our community is extremely hard and clogs up water heaters pretty quickly. We have had our (gas) heater replaced a couple of times by Direct Energy without a squawk. Leasing has proven to be the option of choice in our situation.
Mike
Dec 14 2009
I’m dismayed and kind of stunned by all this, and I need to ensure your readers are properly warned as I’m not sure this has been done yet.
I have seen two positive and strangely similar comments here about National Home Services—do we know these haven’t been written by company representatives?
A salesman from that firm has come to my parents’ door. Although they are both very intelligent, assertive and capable people, they are elderly and in poor health.
To my amazement, they not only let the salesperson into their house, they did their best to co-operate with him. They were in the midst of signing a contract with him simply because, as they told me later, somehow they’d come to the understanding that they had to, and also to get rid of him because they were so tired.
Luckily, I came for a visit while the salesperson was there, and, I hope, before they signed anything (I’m still not sure about that yet—this all just happened).
I had assumed the visitor was from the company that owned the water heater (so did my parents), and that he’d been called there by my parents.
I told the man I’d call him later and asked him to leave, as my parents were clearly upset. Only then I realized he was a salesperson from National Home Service.
The fact that he did not seem ‘pushy’, or whatever one reader here has written, is completely irrelevant. He was bothersome, very intrusive and persistent and, in my view, deceitful.
How can some of the practices mentioned here possibly be legal? If nothing else, I believe there needs to be a huge outcry against these companies and their sales practices. At the very least, we should not tolerate them going to private homes and trying to convince the homeowners to let them in.
I like your work and respect what you are trying to do, Ellen, but in this case I strongly believe you needed to take a much stronger stand against these practices and at least issue a much clearer warning about letting any stranger enter a private home.
Ellen Roseman
Dec 14 2009
Hi Mike. Here’s a link to my column on tricksters in the water heater wars, which ran on Nov. 18,
http://www.thestar.com/business/article/727149–beware-tricksters-behind-water-heater-fraud
I do give the advice you want spread around (near the end):
“Find out who the salespeople are and don’t let them into your home without proper identification.”
I’ve heard that one company (morEnergy) dresses its people in hard hats and reflective vests to give the impression they’re technicians with Enbridge or Direct Energy.
So, never assume anything. Ask about who’s at your door and try to doublecheck their references before letting them in. There’s too much fraud around to let down your guard.
Mike
Dec 14 2009
Thanks Ellen, I’ll check that for sure and pass it on. The salesman I mentioned was from National Home Services and he was wearing a large reflective vest and jacket and ID that looked definitely like a technician from a government agency or public utility.
Trevor
Dec 19 2009
I am very confused that so many people would rent a hot water heater from these companies. I am sure that consumers are overpaying rental fees.
The total cost of buying a hot water heater and having it installed (I am ball parking) would be $1,000 to $1,500. But you are paying $40 a month for 10 yrs? Sounds like this is a pretty good deal for the companies.
MI
Jan 4 2010
I was not home and my mother, who does NOT speak English, was forced to sign a form that literally says:
“I understand that National Home Services is an independent service provider that rents and maintains water heaters.” (they check mark that)
“I understand that National Home Services is not affiliated with the Local Utility Company of my current water heater supplier.” (they checked that)
“I understand that my National Home Services charges will appear in the Other Companies section of my Enbridge Gas Distribution bill.” (they checked that)
“The agent was polite courteous and fully able to answer my questions.” (this was also checked)
Underneath this form is my mother’s signature (in her handwriting) and a date (which was not in her handwriting).
My mother does not speak English. How they could make her sign this is beyond me!
There was also another form indicating that they were coming a week from now to replace our water heater.
They talked their way into my home and went down into my basement and took notes on my current water heater. They wrote down serial numbers of my current water heater and took advantage of my mother’s lack of understanding the language.
She said she didn’t feel good about having this man in the house but she didn’t know what to do.
She was scared to show me the papers at first because she felt like she did something wrong, but what I saw disgusted me!
How can a company have someone sign something that says “I understand” over and over when they don’t even speak the language?
We don’t need a new water heater at the moment. Nor could we afford one right now.
Everyone is a little low on extra money right now. It’s only a few days past Christmas.
After a while. my mother told me they went to all the houses in the neighborhood and EVERYONE signed these forms (all the Portuguese-only speaking houses. In fact, some of them already had the water heaters placed.
In each case, none of them spoke English nor realized what was going on. One day, someone showed up with a new water heater and now there are bills to pay.
Thankfully, I called them and gave them a piece of my mind. I can’t believe they would take advantage of hard working immigrants that didn’t understand the language. The house next door was just redone and he didn’t need a new water heater, but got one. It’s disgusting.
I want to tell this story and make sure it doesn’t happen again to anyone.
I was able to stop it before they actually installed it, but it took an hour on the phone and threats to translate their forms into Portuguese and share them with the people they bamboozled in my neighborhood and their trying to convince me they are the choice when it comes to water heaters.
I’m sorry, but anyone who knocks on my door and takes advantage of my mother is not someone I want to be in business with!
HS
Jan 7 2010
I sold my house in August of 2007. I contacted both Enbridge and Direct Energy well in advance to cancel my services (gas and water-heater rental respectively).
My gas was cancelled as planned. But Direct Energy continues to charge me for the water heater rental.
I have contacted them many times (I have at least 6 case numbers from them). The new owners have confirmed that they are also being charged for the only water heater in the house.
Unfortunately, it is like dealing with a black hole. I contact them and they promise to get back to me within 24-48 hours. They don’t. I call back and get a new case number.
They usually verify that the information is there and that this should be resolved soon. But nothing happens. Very frustrating. For that past few months, a collection agency has been contacting me on their behalf.
Of course, they only charge me about $20/month. The total owed now is about $130 or so. A very negligible amount. But they keep adding on to it.
I would be quite happy to part with several times that amount (given to a local charity), if I could be assured that they will stop this. I don’t think I should be paying in perpetuity for a water heater that I no longer have or use.
I am a partner in a marketing firm and have been very clear in my communications with them. I also teach economics at a local community college.
My thinking is that if they do not respond to my requests, then the same issue must be facing a lot of people (with language barriers, etc.).
Unfortunately, the only thing that persuade companies like this is either media attention or legal action.
I think many of your readers will be interested or may even have had a similar problem with Direct Energy.
Warning
Jan 18 2010
My wife was relaxing outside last May and was approached by a man with National Home Services.
He asked if her water heater had recently been replaced. He persuaded her to have it changed and she could be assured it would save her money because it was an efficient Energy Star appliance. She signed one of these 15 year contracts.
What is disturbing is that my wife has multiple sclerosis and was unable to make this decision. She has been off work for a couple of years now and has issues with problem solving and understanding situations.
You had to be a moron to not know that something was wrong with my wife. Which leads me to believe that this is a significant problem for older people and disabled people, who may sign these contracts without having the capability to understand what is really going on.
When I questioned my wife, she told me it was the gas company that was changing the tank.
It has taken me this long to write to you because I am working full time and taking care of my wife and frankly it was at the bottom of my to do list.
I was just reminded of this again when paying my gas bill and seeing the rental charge from National Home Services of $17.20.
Of course, when I contacted the company after the installation, they said they would be happy to remove it for $400 or so.
I tried to call the representative’s cell phone and it went to voice mail. He has never called me back.
Is there anything you can do to help me get out of this ridiculous contract?
Mark N
Jan 26 2010
We are in the process of replacing our 12 year old rented water heater. Don’t know why it took so long for me to look at the numbers…
Renting vs. owning is a no brainer. Cost to replace our PV unit is ~$1,200.
Even if I financed the entire purchase with a line of credit and then directed my ~$22+GST rental payment to the LOC, I could have the thing paid off in under 6 years.
Effort = Trip to Home Depot.
fedup
May 5 2010
I got scammed by one of the new companies. It has been several months now but the contract did not get transferred from the old company DE to the new one. But both companies are charging me for the only hot water tank in the house. Both blame the other. Plan to cancel the new one because they have not delivered and will cancel DE later and put in my own unit.
Teena
Jun 14 2010
I just fell into the same scam today from National Home Services, claiming to replace my water heater free of charge. After reading this page, I immediately called them up to cancel the installation appointment and cancel the contract on the same day, within an hour.
Now I was told that I would not be charged anything since nothing was installed.
However, can anyone who’s been through this assure me that I will not be charged for anything??
Any response to this post of mine is greatly appreciated.
john tzikas
Jul 12 2010
Why don’t you write articles putting pressure on these companies to treat their employees better? It all starts from there — knowledgeable employees will lead to good service, making rental fees easy to swallow.
As an employee of one of these clown companies (RHC), it’s embarrassing to tell people I work for them. They are too busy fighting and asking for a favourable press, instead of realizing their customer service is a mess.
They have people who talk to customers like they live in a barn. Just the lack of knowledge is excruciating.
A customer wants an efficient, acknowleging person at the end of the line– not a chatty windbag whose act doesn’t even belong on a highway truck stop restaurant.
Then they try to justify the rental fees for 15 years. It costs more to buy the beast after 15 years of renting than it does to put it in.
Reliance and DE think the small town homeowner they serve is a dumb hick. It’s just stupid, Toronto-centric ambivalence at its worst.
These are homeowners, lawyers, doctors, teachers, that we are trying to pull a fast one on.
Their websites are filled with jargon and colloquial mumbo-jumbo. You need to be more on the attack with them. Your articles need to go further.
Their rebuttals to your articles are a gem. Obviously, the management are the ones who are small town hicks, not the people they provide service to.