“Smart Home” Savings Scams: A New Take on the Classic Water Heater Scam
With the rise of popular discussions around issues of clean energy, some shady companies have capitalized on the trend by using it as a trojan horse to scam unsuspecting consumers with an age-old trick. It used to be the case that unscrupulous salesmen would go door to door and employ high-pressure sales tactics to get consumers to agree to rent water heaters at exorbitant rates. In reality, it is almost never a good idea to rent a water heater—what you pay in rental fees is often several times more costly than if you were to simply purchase a unit
As of March 1, 2018, certain changes were made to the Consumer Protection Act which banned unsolicited door-to-door sales for certain household goods and services. Companies looking to employ the old water heater scam, therefore needed to be creative about how to get into consumers; homes to make their sales. The smart-home scam is the latest iteration of that.
These businesses are often named using buzzwords like “green”, “clean”, “energy”, and
“savings”. They often have either “Ontario” or “Provincial” in their name. Their marketing and
design often make them look as though they are government-sponsored or even a crown
corporation. Their websites are normally very professional looking and filled with lists of
sponsors or associates that are mainstream and reputable companies, even though in reality
they may have little to no connection to those other organizations.
The typical tactic of these salesmen is to post on Facebook or other social media platforms
pretending to be reputable well-established companies. They advertise things like a free Google Nest, or other neat gadgets if you sign up or allow them to inspect your home. Once they arrive, they employ high-pressure sales tactics and try to sell you on their equipment like water and air purifiers, and especially a water heater.
Consumers will sign a deal to buy out of any agreement they already have, with terms of
sometimes $30,000 - $40,000 paid over several years in order to rent this equipment. These
high costs are justified, they will say, by the incredible amount of savings this equipment will
give consumers on gas and energy bills, as well as rebates they purport to be able to obtain.
From the information we have gathered, none of this is true, and people end up getting a few
hundred or thousands of dollars worth of gadgets that may not even work properly in exchange for a lien on their home.
This means sellers or those looking to remortgage are faced with paying off a lien in a lump sum. If you try to call the company, you will often not be able to reach them, or they will give you the run-around and prevent you from getting out of the deal, with ridiculously high costs buy-out agreements.
You can leverage your rights granted under the Consumer Protections Act in an attempt to
persuade these companies to engage in a rescission of the contract and arrange for the lien
placed against your home to be removed.
If you have signed an unconscionable contract with one of these companies, it is important to verify whether a lien was registered on your home and seek legal advice.
Click the link below to get started with your complimentary consultation.
About the Author
Licensed Paralegal and Notary Public
AJ Murray Legal Services P.C