Why I’m always writing about water heaters

I can’t seem to stop writing about the nasty tricks played by water heater salespeople. Just when I think there’s nothing new to say, I learn about another outrage.

An older couple, Sandra and Daryl, wrote to me about their experience with Ontario Consumers Home Services (OCHS), a company I wrote about last week in the Star. Along with renting a water heater, they ended up agreeing to a new furnace, too.

OCHS likes to install the rented equipment right away, rather than waiting until Ontario’s 10-day cooling off period end. People might change their minds after 10 days, the company’s chief executive Vitali Godonooga told me.

What if people change their minds during the cooling off period, but after the rented equipment is installed? When Sandra and Daryl told OCHS to get rid of their new stuff, they were threatened with removal fees. They felt abused and mistreated.

Who can blame them? This water heater company, which has been in business for just over a year, was penalizing them for exercising their legal right to cancel without a penalty. You can read their story below and the company’s response.

I also have an update about a court case that tested a rental company’s responsibility when a water heater leaks. Reliance Home Comfort denied liability, but was shot down by the judge in divisional court. Here’s my earlier article.

Reliance appealed and was shot down again this week. It was ordered to pay $16,000 to the homeowner for water damage in the basement caused by the leak.

This article in Canadian Underwriter talks about the key issue. Does a rented product come with an implied warranty of fitness during its entire lifespan? The court said yes.

The 14-page judgment by E.E. Gillese, released Nov. 27, dismissed Reliance’s argument that the contract was signed before the Consumer Protection Act was strengthened in 2005.

Here’s the crucial argument:

Ms. (Shirley) Szilvasy was an ordinary homeowner. Reliance is in the business of supplying — by means of providing and servicing — hot water tanks to residences.

At the relevant time, Reliance had approximately 1.2 million tanks on lease to its customers. In the circumstances, there can be no doubt but that Reliance knew the purpose for which Ms. Szilvasy rented the hot water heater (namely, to produce hot water for her home) and that she was relying on its skill and judgment to provide a properly functioning water heater.

Accordingly, there was an implied condition that the water heater would be “reasonably fit” for the purpose of heating water in her home. The water heater in question was not reasonably fit for that purpose because it leaked.

Here’s a link to another Reliance case decided at the same time.

So, why am I always writing about water heaters? It’s a business that pits smooth corporate operators against naive, inexperienced homeowners. The result is often exploitation.

Much as I’d like to move on, I can’t avert my eyes while the steamrolling continues and grows. Luckily, the courts are starting to see the business in its true light.

Author: Ellen Roseman

Consumer advocate and personal finance author and instructor.

24 thoughts on “Why I’m always writing about water heaters”

  1. It was with great interest that my wife and I, both seniors, read your column about door to door water heater salespeople.

    We also have a horror story to tell. The same company, Ontario Consumers Home Services, sold us on a new water heater and a new more energy efficient furnace.

    Both were installed in our home the very next day after the sales pitch (Nov. 9th, 2012).

    By the time the fine print was read (the next day I am sorry to say), we came to our senses and cancelled the deal by letter, on Nov. 10th.

    Since it was the weekend, the letter did not reach them until the 13th. This was accepted by OCHS and well within the 10-day grace period by Ontario law.

    Now comes the interesting part. They were not interested in accepting our cancellation at all.

    On two occasions, they offered:

    1. We were to contact a licensed gas fitter and have their equipment removed and picked up by OCHS. We were told, however, that this was full of liabilities for anyone other than OCHS to do.

    2. Pay a penalty. This was to cover the cost of installation and removal and would be $1,600, plus HST, which was originally waived with our enrolment in their rental program.

    My question: Doesn’t this $1,600 penalty fall under the 10-day government period? We feel we should not pay this, nor can we afford to.

    They said for days that they would appear and take their equipment, but they never arrived. We assume it is because they are still expecting us to pay the $1,600 for the removal up front. We do not accept this.

    It has now been days since they installed the equipment. How long can they legally leave it in my home?

    We have purchased a new system of better quality, at half their cost, waiting to be installed, and it is now stored in our garage.

    We opened a complaint file, dated Nov. 19, with the Ontario Ministry of Consumer Services, but have had no word from them yet.

    Can you help us with any of this? The more time that goes by, the more our worry and stress increases.

  2. Dear Sandra and Daryl, I will be following up with your daughter this evening to arrange the pick up of our water heater and furnace.

    Please be reassured that we want the matter to get resolved for you as soon as possible.

    I believe (based on the notes in our database) that you, the customers, received some conflicting information from our customer service reps.

    Therefore, we will coach them to ensure these situations do not repeat going forward.

  3. I signed up for a furnace maintenance plan with Direct Energy. When the technician came to do the maintenance, he noticed I had a Reliance water heater.

    He told me that if I switched, Direct Energy would pay the cancellation fee and send me a $100 prepaid MasterCard.

    I agreed and he called his supervisor to set it up.

    Of course, none of those promises materialized. I called Direct Energy and they claim they never had this promotion for water heaters, but only for protection plans. Meanwhile, they’ve already got their equipment in my house.

    I’m waiting to hear back about what they are going to do about this. If they won’t give me what was promised, I plan to make a complaint to the Better Business Bureau about dishonest sales practices.

  4. We became Direct Energy customers when, upon deregulation, they bought that piece of the business from Consumers Gas (now Enbridge).

    We did not have a contract per se, and understood that once the tank had been amortized, we would be free to move to another company, or simply to return the tank and buy one of our own.

    In recent years, we have managed to regularly fend off door to door hot water tank peddlers (after almost getting taken in once), but were confident that at least Direct Energy was treating us fairly — until they started hounding us to sign a new contract.

    That they wanted to preserve their market share was understandable, but the fact that they couched it in a customer loyalty program and signed us up against our will (the telemarketer wrongly stated that he was only sending us info, but that we were under no obligation) was the straw that broke the camel’s back.

    We now own our water heater free and clear.

  5. I was wondering if it’s possible to buy out a Reliance hot water tank and save the rental charge every 3 months.

    I am sure that if the unit failed. a local company would be more than happy to service it or replace it.

    Of course, that costs, but everything does. Any comments on this plan? Thanks.

  6. So I received my call from Direct Energy this morning. They have agreed to credit my account $40 for the Reliance cancellation fee, and are also mailing me the $100 prepaid credit card I was promised.

    The first three people I spoke to said that this promotion never existed for water heaters. However, the final person I spoke to said that it was a well-known promotion in the company, and he was unsure why the call centre was unaware of it.

    Just goes to show that if they promised you a deal and then try to flip flop, ESCALATE. Don’t take the word of those in the call centre.

  7. Hello PDB, I sincerely apologize for the frustrating experience and will do my best to assist.

    If you could please contact me at rmassingham@reliancecomfort.com, I will work to address the outstanding issue regarding the Product Return Number, as well as the problem with the outstanding invoice.

    I’m hopeful that we can resolve this quickly and to your complete satisfaction. Thank you. RM

    item 15-2-a says .. if old or non-fluent in English(Ontario), then there is no “contract” since it is an unfair practice.

    that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;


    False, misleading or deceptive representation

    14. (1) It is an unfair practice for a person to make a false, misleading or deceptive representation.

    Examples of false, misleading or deceptive representations

    (2) Without limiting the generality of what constitutes a false, misleading or deceptive representation, the following are included as false, misleading or deceptive representations:

    1. A representation that the goods or services have sponsorship, approval, performance characteristics, accessories, uses, ingredients, benefits or qualities they do not have.

    2. A representation that the person who is to supply the goods or services has sponsorship, approval, status, affiliation or connection the person does not have.

    3. A representation that the goods or services are of a particular standard, quality, grade, style or model, if they are not.

    4. A representation that the goods are new, or unused, if they are not or are reconditioned or reclaimed, but the reasonable use of goods to enable the person to service, prepare, test and deliver the goods does not result in the goods being deemed to be used for the purposes of this paragraph.

    5. A representation that the goods have been used to an extent that is materially different from the fact.

    6. A representation that the goods or services are available for a reason that does not exist.

    7. A representation that the goods or services have been supplied in accordance with a previous representation, if they have not.

    8. A representation that the goods or services or any part of them are available or can be delivered or performed when the person making the representation knows or ought to know they are not available or cannot be delivered or performed.

    9. A representation that the goods or services or any part of them will be available or can be delivered or performed by a specified time when the person making the representation knows or ought to know they will not be available or cannot be delivered or performed by the specified time.

    10. A representation that a service, part, replacement or repair is needed or advisable, if it is not.

    11. A representation that a specific price advantage exists, if it does not.

    12. A representation that misrepresents the authority of a salesperson, representative, employee or agent to negotiate the final terms of the agreement.

    13. A representation that the transaction involves or does not involve rights, remedies or obligations if the representation is false, misleading or deceptive.

    14. A representation using exaggeration, innuendo or ambiguity as to a material fact or failing to state a material fact if such use or failure deceives or tends to deceive.

    15. A representation that misrepresents the purpose or intent of any solicitation of or any communication with a consumer.

    16. A representation that misrepresents the purpose of any charge or proposed charge.

    17. A representation that misrepresents or exaggerates the benefits that are likely to flow to a consumer if the consumer helps a person obtain new or potential customers.

    Unconscionable representation

    15. (1) It is an unfair practice to make an unconscionable representation.


    (2) Without limiting the generality of what may be taken into account in determining whether a representation is unconscionable, there may be taken into account that the person making the representation or the person’s employer or principal knows or ought to know,

    (a) that the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors;

    (b) that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;

    (c) that the consumer is unable to receive a substantial benefit from the subject-matter of the representation;

    (d) that there is no reasonable probability of payment of the obligation in full by the consumer;

    (e) that the consumer transaction is excessively one-sided in favour of someone other than the consumer;

    (f) that the terms of the consumer transaction are so adverse to the consumer as to be inequitable;

    (g) that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment; or

    (h) that the consumer is being subjected to undue pressure to enter into a consumer transaction.

    Renegotiation of price

    16. It is an unfair practice for a person to use his, her or its custody or control of a consumer’s goods to pressure the consumer into renegotiating the terms of a consumer transaction.

    Unfair practices prohibited

    17. (1) No person shall engage in an unfair practice.

    One act deemed practice

    (2) A person who performs one act referred to in section 14, 15 or 16 shall be deemed to be engaging in an unfair practice.

    Advertising excepted

    (3) It is not an unfair practice for a person, on behalf of another person, to print, publish, distribute, broadcast or telecast a representation that the person accepted in good faith for printing, publishing, distributing, broadcasting or telecasting in the ordinary course of business.

    Rescinding agreement

    18. (1) Any agreement, whether written, oral or implied, entered into by a consumer after or while a person has engaged in an unfair practice may be rescinded by the consumer and the consumer is entitled to any remedy that is available in law, including damages.

    Remedy if rescission not possible

    (2) A consumer is entitled to recover the amount by which the consumer’s payment under the agreement exceeds the value that the goods or services have to the consumer or to recover damages, or both, if rescission of the agreement under subsection (1) is not possible,

    (a) because the return or restitution of the goods or services is no longer possible; or

    (b) because rescission would deprive a third party of a right in the subject-matter of the agreement that the third party has acquired in good faith and for value.


    (3) A consumer must give notice within one year after entering into the agreement if,

    (a) the consumer seeks to rescind an agreement under subsection (1); or

    (b) the consumer seeks recovery under subsection (2), if rescission is not possible.

    Form of notice

    (4) The consumer may express notice in any way as long as it indicates the intention of the consumer to rescind the agreement or to seek recovery where rescission is not possible and the reasons for so doing and the notice meets any requirements that may be prescribed.

    Delivery of notice

    (5) Notice may be delivered by any means.

    When notice given

    (6) If notice is delivered other than by personal service, the notice shall be deemed to have been given when sent.


    (7) The consumer may send or deliver the notice to the person with whom the consumer contracted at the address set out in the agreement or, if the consumer did not receive a written copy of the agreement or the address of the person was not set out in the agreement, the consumer may send or deliver the notice,

    (a) to any address of the person on record with the Government of Ontario or the Government of Canada; or

    (b) to an address of the person known by the consumer.

    Commencement of an action

    (8) If a consumer has delivered notice and has not received a satisfactory response within the prescribed period, the consumer may commence an action.

    (9) If a consumer has a right to commence an action under this section, the consumer may commence the action in the Superior Court of Justice.


    (10) In the trial of an issue under this section, oral evidence respecting an unfair practice is admissible despite the existence of a written agreement and despite the fact that the evidence pertains to a representation in respect of a term, condition or undertaking that is or is not provided for in the agreement.

    Exemplary damages

    (11) A court may award exemplary or punitive damages in addition to any other remedy in an action commenced under this section.


    (12) Each person who engaged in an unfair practice is liable jointly and severally with the person who entered into the agreement with the consumer for any amount to which the consumer is entitled under this section.
    Limited liability of assignee

    (13) If an agreement to which subsection (1) or (2) applies has been assigned or if any right to payment under such an agreement has been assigned, the liability of the person to whom it has been assigned is limited to the amount paid to that person by the consumer.
    Effect of rescission

    (14) When a consumer rescinds an agreement under subsection (1), such rescission operates to cancel, as if they never existed,

    (a) the agreement;

    (b) all related agreements;

    (c) all guarantees given in respect of money payable under the agreement;

    (d) all security given by the consumer or a guarantor in respect of money payable under the agreement; and

    (e) all credit agreements, as defined in Part VII, and other payment instruments, including promissory notes,

    (i) extended, arranged or facilitated by the person with whom the consumer reached the agreement, or

    (ii) otherwise related to the agreement.
    Waiver of notice

    (15) If a consumer is required to give notice under this Part in order to obtain a remedy, a court may disregard the requirement to give the notice or any requirement relating to the notice if it is in the interest of justice to do so.


    19. (1) This Part applies to consumer transactions that occur on or after the day this section is proclaimed in force.

    (2) The Business Practices Act, as it existed immediately before its repeal by the Consumer Protection Statute Law Amendment Act, 2002, continues to apply to consumer transactions that occurred before its repeal.

    END ****

  9. It irks me when I hear “we’re doing you a favour” when, in fact, you are doing the right thing because you don’t want to go to court with me.

    If my old grandmother was subject to this, I’d also sue for punititive damages (as the law provides for), with the small claims court for their “added costs and interest” up to their limit ($25,000).

    The Ontario Government’s consumer agency says the worst cases they receive are HEATING (number 2, I think), worse than car repairs and car salesmen!!

    As for putting up a sign, show me that law, please. You just made it up, sir, didn’t you??

    Is it effective in a French speaking community? What dimensions are required? Bull-O-KNEE.

  10. I was visited this afternoon by a representative from Ontario Consumers Home Services.

    At this point, I’m used to the spiel: they’re in the neighbourhood today and checking to see the current state of your water heater. It may need replacing since it’s not energy efficient, it’s too old, it has poor pipes or some other reason.

    Guess what? I don’t deal with Ontario Consumers, nor had I even heard of them until today. I’m already renting my tank from a similar company (MorEnergy) and I regret signing up for their very long-term contract.

    This woman was very insistent that I let her into the house and took a rude tone when I showed some resistance. Well, tough beans!

    I’m tired of this endless supply of reps, always from different companies, coming to the door and trying to bully their way in.

    I regret even having told her that I currently rent from another company, because it’s none of her business.

  11. We have these agents come by our neighborhood every other month. I let them in my house once and thank goodness did not sign on. How can they keep up this terrible practice of screwing the consumers like this?

  12. I’d like to know why these people keep doing this. My wife answered the door one day to a salesman from OCHS.

    She was told that he was doing inspections on hot water tanks in the area and needed to see our tank. Since he was very demanding, she let him into the basement.

    Once there, he told her this tank needs to be changed. After a while of misleading her, she signed a contract for the new tank.

    By the next day, the nightmare started. They came and installed the tank in the afternoon. The next morning, I was about to take a shower. No hot water and the basement was flooded (my god). Took a few hours to get the water out.

    I called them to get this fixed. They showed up in the evening. After that, I had to call them another 5 or 6 times. The tank will shut off every 10 days or so. No hot water.

    Finally, changing the pilot assembly seems to work. It has not happened again.

    I got tired and told them I wanted to cancel the contract and take the tank away. They treated my wife with a high cancellation fee of $1,600. Very rude over the phone.

    We can’t not afford this, it’s crazy. I wish someone can do something to help.

  13. I’m sorry to say that Ontario Consumers are still at it – I’ve just discovered that I have been scammed by them. To make a long story short: we have recently moved to an area that is totally new to us, where I am a first-time home-owner. I have never used natural gas before, and we had been in our new house for less than a week when an Ontario Consumers salesman shows up at our door to offer us a new hot water tank. He deceived me in multiple ways: telling me that he was here on behalf of Enbridge (untrue); that I would not have to pay anything for the new hot water tank (misleading at minimum), and implied awfully strongly that this was mandatory.

    If anyone from Ontario Consumers offers you a new hot water tank, do NOT accept! You do NOT have to, and it will cost you!

  14. We want to cancel our Reliance water heater rental agreement.

    Can anyone offer a basic “how to”?

    If I just outright stopped paying and dropped off the tank at their depot, how much trouble can I get in?

    Has anyone here been raked over the coals by their collections department?

  15. On Jan. 9th, three people showed up at our house. One approached the front of the home, looked at the security camera, said something to his other partners and then went to the side of the house.

    He knocked on the downstairs tenant’s door in order to gain entry to the home. The tenant is new to the country and believed they were supposed to be in her house.

    I freaked out at their service reps and demanded a properly licensed gas fitter come and make sure their staff did not touch anything. I am calling Enbridge to come out and make sure they touched nothing. I hate that they are allowed to do this.

    The police never press charges, even though this activity is illegal. Why are they never CHARGED!!!

  16. Reliance coerced my tenants into signing a 7 year contract for a water heater against my wishes and WITHOUT my written consent.

    Do I have legal recourse against them?

  17. When I bought my brand new house from Mattamy in February 2014, I had to sign a “Schedule Z” form, stating that I must rent the water heater for 7 years.

    I protested to the sales person, but in the end if I didn’t sign it, I couldn’t buy the house.

    When I moved into the house in October, Reliance swiftly sent me the Terms and Conditions and first month’s bill. I was talked into “trying out a 95% efficient EnviroSense water heater tank” for a year, as it saves on my Enbridge gas bill and my account setup fee was waived.

    The rental was $40 compared to $35 when I signed the schedule. After a year and a half, i found there wasn’t really much savings. (Enbridge’s rate keeps going up quarterly. That’s another bone of contention.)

    I asked how to terminate and was told I had to buy it out at “market value” of $2,600. Latest quote was $2,400. In the last conversation I had with their retention unit, they dropped my monthly rate by $9 a month.

    I did my homework and saw I could buy two new water heaters with 6-year warranties, INCLUDING installation.

    I am frustrated. I argued that I was signing under duress. I can’t get out of this unfair contract. Governments are not doing anything to protect new home buyers.

    A water heater is not a UTILITY. Why are we here in Ontario FORCED to RENT? I want to own my water heater and I’m willing to pay market price, not inflated prices by 100%!. Please advise and email me. Many thanks.

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