Hydro sales firms fined $56,500 for false practices
Hamilton Spectator - April 27, 2002
Ontario's energy regulator clamped down for the first time on door-to-door electricity marketers yesterday, just days after police began warning residents about rising forgery and fraud. The Ontario Energy Board slapped a total of $56,500 in fines on two major electricity retailers for inappropriate sales practices at the door.
It cited agents for Ontario Hydro Energy Inc, also known as OnSource, in 14 incidents of licence contravention, and Toronto Hydro Energy Services Inc.'s sales people in two cases. (Editors Note: in November 2005, Ontario Hydro Energy/OnSource/Union Energy, changed its name to Reliance Home Comfort.)
Both firms have been offering long-term contracts in the Hamilton region.
The board said the sales reps misled consumers about prices, misrepresented who they worked for or used undue pressure to get contracts signed.
In one incident, an agent told a consumer untruthfully that his electricity rate would drop by 25 per cent if he signed at the door. Sales agents also failed to provide consumers with copies of their contracts, and in another case, entered a residence without invitation, badgered the homeowner and would not leave.
"This has got to be a wake-up call for the province," said Liberal Dominic Agostino. "They should freeze all these sales until they can ensure Ontarians they are not getting ripped off."
The energy board, which licenses electricity marketers, has been heavily criticized in the last few weeks for failing to act on complaints of strong-arm tactics. Concern increased in the run-up to the new electricity market, which opens next Wednesday.
Board spokesperson Tom Park said no special timing was involved in yesterday's announcement of penalties.
Toronto Hydro Energy -- which was fined $10,000 for its two incidents -- said it would suspend door-to-door sales and do its own internal probe.
"Our relationship with customers is very important," said spokesperson Cathren Ronberg. "We consider these to be very serious claims."
Ontario Hydro Energy, a retail marketing arm of Hydro One, said it would also investigate but will continue door-to-door sales.
"We have a zero tolerance policy with respect to unacceptable behaviour," said spokesperson Terry Young. "If there are reports, we investigate."
His company was fined $46,500 for the 14 contraventions. The companies have 15 days to appeal to the board.
None of the incidents cited by the energy board involved the forging of contracts -- a criminal offence that rapidly gained attention last week.
The NDP at Queen's Park called for special government fraud squads after it was disclosed that officials from seven police forces, including Hamilton, had met twice with the energy board. The officers expressed concern over the high volume of complaints about fraudulent contracts that homeowners have not actually signed.
Agostino said the cases described yesterday by the energy board are only a fraction of what is going on.
"In view of what's happening, anybody who signed a contract with any company should be able to get out," he said.
Since electricity marketers hit the streets of Ontario in the summer of 2000, the energy board has received more than 1,500 complaints. This is the first time penalties have been issued.
Mark Garner, director of licensing at the board, said he is disappointed with the marketing behaviour.
"Over the past year, the board has worked with electricity retailers ... to ensure fair marketing practices, and they have been warned to correct inappropriate behaviour," Garner said.