Business and Consumers Part I

juillet 10, 2014

How do we protect consumers while encouraging business…?

A couple of weeks ago I arrived at work on a Monday morning to find one of our seniors waiting outside our office. He looked tired and worried and I escorted him immediately into our offices.

This 86 year old man had received an invoice from an Energy company demanding some $475.00 to release him from his contract with their company. The elderly man had contacted this particular company and had informed them of his displeasure with the costs for energy and requested they cancel his agreement. The cancellation occurred but to his surprise it was conditional on paying the release amount.

I assured this gentleman that we would help him and I began to question him about how he had entered into this agreement in the first place. He recounted for me the story of a door-to-door salesman who showed up at his house one night, and believing that he had been sent by the city and that he was with Union Gas, he proceeded to provide old bills and signed up for a reduced rate under this five year agreement.

Little did he know that his account had been transferred to an alternate energy supplier. This was not Union Gas or Ontario Hydro. This was a company like Just Energy, Direct Energy or whatever other name they use to sell their goods.

I explained to this very anxious elderly gentleman that we would assist him and I prepared a letter to the company in question explaining that this man had been misled and induced to enter into an agreement which he did not understand nor did he want. I demanded that they cancel the agreement without penalty given the nature of this so called “agreement”. The company in question responded almost immediately and agreed to cancel the existing agreement and to cancel any fees related to releasing him from the contract.

Needless to say the elderly man was relieved and elated. Similar stories like this one are encountered weekly by one of our staff. We deal with situations like these on an ongoing basis and unfortunately people like this man are often induced or misled to believe that they are gaining by agreeing to sign up for such a program.   The outcomes are not always as easy as this one, but depending on the situation, we have proven to be successful in most of these interventions by cancelling agreements like these without penalty.

We encourage people to check out these companies before they sign. Some do, but most don’t.   We find that people are uncertain about where to get accurate information about these or other companies and for many they just sign up to get rid of the salesperson and believe that the impact on them will be minimal. The impact is not minimal and people are learning that utility costs are already high and companies like these are very often charging even more over the five year contract period.

People also lose sight of these five year contracts and they don’t realize that they renew automatically after five years if you don’t cancel them in writing.

Pitfalls like these need to be considered when entering an agreement with these utility providers or with any door-to-door salesperson.

The Legal Clinic is exploring ways and means to empower our consumers while also protecting and promoting legitimate businesses who are trying to act with integrity and honesty.

Next month watch out of for part two of this series….

If you have questions or concerns please contact Kevin at the Standard or Ken at the Legal Clinic or by writing bondyk@lao.on.ca .