FOR IMMEDIATE RELEASE: July 3, 2013
Simcoe – As legislative debate drew to a close at Queens Park two weeks ago, Haldimand-Norfolk MPP Toby Barrett spoke in support of consumer protections when it comes to door-to-door water heater sales.
In speaking to, Bill 55, the Stronger Protection for Ontario Consumers Act, 2013, Barrett noted the proposed legislation would, “double the cooling-off period…prevents new suppliers from installing new heaters for 20 days…[and] mandates that all sales be in writing, and recorded.”
“We need the clear rules and smooth transition, leading to a more open, fair competition – this has not been the case with much of the door-to-door water heater sales business,” Barrett indicated. “These kinds of tactics are certainly a concern, especially when you run into a crooked water heater salesman. We’ve heard of customers trying to cancel the service. They’re put on hold for long periods of time; they are talked out of it. Scare tactics are sometimes used. Cancellation charges can kick in that run up to hundreds of dollars.”
Barrett went on to read an email from a constituent with respect to the water heater business who found he was being billed too much after buying a house in December, 2012.
“I called my hot water rental service provider and found out they had been charging the previous owners of the house for a 50-gallon water heater unit that was ventilated by a power motor,” Barrett read. “After verifying with my customer support agent that in fact the unit in my residence was only a 40-gallon tank, non-motor ventilated…I was then passed on to a customer service manager [who] apologized and said my contract would be revised and I should be credited for the overpayments.”
Barrett indicated that while the story had a happy ending to an aware consumer who was able to track it down, not many have that ability.
“You can’t legislate away deception or vulnerability. We need a strengthening of the enforcement tools and to have other recourse beyond the court system. Many who are taken for a ride just cannot afford that system.”
Bill 55 awaits further second reading debate when the Legislature returns from its summer break.
For more information contact MPP Toby Barrett At 519-428-0446 or 1-800-903-8629
LEGISLATIVE ASSEMBLY OF ONTARIO HANSARD
Monday 10 June 2013
STRONGER PROTECTION FOR ONTARIO CONSUMERS ACT, 2013 /
Mr. Toby Barrett: I also support the bill, the Stronger Protection for Ontario Consumers Act. We know it’s an omnibus bill. It covers three main areas: water heater sales, debt settlements and real estate transactions. I guess it’s been 10 years since we’ve had legislation like this to protect the consumer, and that goes back to the Consumer Protection Act of 2002, enacted by the Honourable Tim Hudak. So we have a bill. Bill 55 addresses three key areas in the marketplace to make the marketplace a little more fair, to provide some more choice and to help instill more confidence in our consumers. We have government for a reason, and one of those reasons is to protect consumer rights. One of those reasons is to ensure a tough environment for dishonest businesses. That is essential for consumer confidence. We all realize the need for rules, rules that are clear, universal, understandable and accessible. Consumers should not be confused by a patchwork of regulations. Businesses, on the other hand, must know the type of environment they’re expected to operate in. Currently, a legal claim by a consumer against any less-than-honest business can take months or years to process. It often can involve skyrocketing legal costs, stress, and again a decrease in consumer confidence. With respect to water heaters and the door-to-door sales, this legislation has a number of measures. It will double the cooling-off period. It opens the door for other cooling-off periods to be doubled. It prevents new suppliers from installing new heaters for 20 days. It makes the supplier liable for a cancellation charge if they do install before the 20-day limit. It mandates that all sales be in writing, and recorded, scripted follow-up calls must be made to the consumer. We need the clear rules and smooth transition, leading to a more open, fair competition. This has not been the case with much of the door-to-door water heater sales business. These kinds of tactics are certainly a concern, especially when you run into a crooked water heater salesman. We’ve heard of customers trying to cancel the service. They’re put on hold for long periods of time; they are talked out of it. Scare tactics are sometimes used. Cancellation charges can kick in that run up to hundreds of dollars. I received information from a constituent with respect to the water heater business: “After purchasing a house in December 2012, I realized we were being billed for services for our hot water heater rental unit through” a well-known company—I’ve got the name here, but I won’t mention the name—“at a higher than average rate. “I called my hot water rental service provider and found out they had been charging the previous owners of the house for a 50-gallon water heater unit that was ventilated by a power motor. “After verifying with my customer support agent that in fact the unit in my residence was only a 40-gallon tank, non-motor ventilated, they had been overbilling the previous owners for months (maybe even years). “When I verified these details through the unit’s serial number, my agent became very quiet and I was then passed on to a customer service manager. The manager apologized and said my contract would be revised and I should be credited for the overpayments.” There’s an aware consumer who was able to track it down. Not many have that ability. You can’t legislate away deception or vulnerability. We need a strengthening of the enforcement tools and to have other recourse beyond the court system. Many who are taken for a ride just cannot afford that system. Now, we know the bill looks at debt settlement companies, and we’ve all heard the pitch: “Your bills are too onerous. You’re overdue. You’re under pressure, and there’s a way out through debt consolidation.” Many, eager to escape their debt concerns, unfortunately, hear what they want to hear, or hear what the settler wants them to hear. In many cases, vulnerable people resort to a debt settler. Again, if the deal sounds too good to be true, it probably is. So we have legislation here to deal with this mandating that all contracts be in writing, setting a cap on the fee, prohibiting charging upfront fees, setting a cooling-off period—in this case, 10 days—mandating certain disclosures and forbidding certain advertising practices, and establishing penalties. Through these measures, the legislation seeks to restore confidence and security in something that many people have been abused over the years. There are honest, experienced debt settlers out there, and they can be a godsend. A reputable debt settler can bring a wealth of experience, contacts and sometimes alternatives to bankruptcy. Again, we have government for a reason: to ensure that the good guys are in this business and provide those alternatives, while shutting out the bad ones. There was a story reported in the House here with regard to a young woman. She had compiled $18,000 in credit card debt and turned to a company that had been advertised on Facebook. This young woman paid the company offering to settle her debt almost $3,800 to help her before finding herself facing a lawsuit from the bank. Eventually, she ended up filing for bankruptcy anyway. Real estate sales: I will wrap up with this portion of this omnibus bill. This has been mentioned. It removes restrictions against charging both a fee and a commission for selling or buying a house, while also mandating that offers for a property be made in writing and allowing the consumer to inquire with the Real Estate Council of Ontario as to whether other offers were made on that same property. During debate, we heard talk of phantom offers. That’s a practice that some real estate agents have been known to use as a high-pressure sales tactic. The end result: It distorts the marketplace. A constituent relayed to me a face-to-face situation with respect to a very recent real estate transaction. “While looking for a house, we made an offer on one we liked. The offer was $30,000 lower than the asking price. “This offer was the only offer made. The real estate agent representing the sellers manipulated this offer. “A few days after our offer went in, another couple who was interested in the property decided to make an offer because they were told by the real estate agent that the current owners were thinking of taking our offer because it was a good one (when in fact they weren’t happy with our offer). “The couple decided to go ahead with an offer which was $10,000 over the asking price because they were afraid our offer was going to be accepted. The agent used our offer as a scare tactic to get the second offer at a higher price. “The tactic worked, and they accepted the second offer at $10,000 over asking price. “After the couple moved in, they found out the house was filled with mould and the entire roof needed to be redone.” As we can see, phantom offers—both home sellers and buyers rely on accurate information—are bids that are jigged by the agents themselves, and you’re never really 100% sure about the true nature of the offers that are coming in. That’s really no way to do business. These kinds of phantom offers distort the market and jacked up the price in the case I just mentioned. That doesn’t help anyone. Inflated prices mean bigger mortgages, which mean more household debt and higher default rates. Again, it diminishes that trust in our real estate industry, especially when a consumer finds out they’ve been left out on a limb; they have nowhere to turn. 1440 As I mentioned, we haven’t had this kind of legislation for over 10 years. We’ve waited quite a while for this bill. It is long overdue, and I’m willing to support it.