In this blog, I have reviewed an article and video from the CBC marketplace regarding their investigation about the fraudulent business practices of one company in connection to HVAC.

My first job right out of college in the Philippines was connected to HVAC. So this article from CBC marketplace really hits me. As I watch the video presentation in horror how very unethical business practices were done by these so-called licensed HVAC contractors, who did not even lift a finger to inspect the machine. It is clear that the guy (presenting himself as a sales manager and licensed HVAC contractor) from the video does not have any technical capability regarding HVAC, and just like a predator circling around his prey the way he looks for something, anything that he can point out to convince the homeowner to fall into his trap. And to note that he spends less than 10 minutes checking the actual equipment and almost one hour “pitching” his “offers that can save money” really annoys me to no end.

But this is just the entrance to the horror house that is HVAC rental scams. In the course of the article and the video, investigative reporters Rosa Marchitelli, Katie Pedersen, and Greg Sadler uncovers the way that these companies milk money (initially) from unsuspecting homeowers, then finally trapping them (holding their home contracts hostage). The ways of scamming vary, but the pattern is the same. First, they either reach the homeowner via an advertisement, a flyer, or a cold call, telling them that either they pre-qualify for something, or that there is a new government HVAC regulation that their old equipment is not capable of following, or they there is an offer of free (small thing like a smart thermostat, or smart home security camera), something, anything, to get their foot literally into the door.

And once into the house, the luring and scare tactics ran rampant. From confusing jargon, false representation about government requirements and rules regarding HVAC systems, to “helpful warnings” about “not bumping into the fragile water tank”, the lies and misrepresentations are many. One thing that these scammers emphasized is the savings the homeowner will get if they avail (note: rent) the system. However, these systems are the top of the line models (which many homeowners cannot afford or want) which results in higher monthly amortization payment, and large fees on top of the that if and when the homeowner decides to cancel the deal. And to think that did not really inspect the machine that they say is the cause of the problem. Those who regretedly signed up for these rent agreements (foul deals) are actually forced into paying more than they were paying before, and for longer. They are also overcharged for components that can be had anywhere else for far less expense.

But it gets even worse that this. Because by signing the contract with these scammy companies, the contract actually stipulates that the home is bounded by a lien – a legal right by these scammy companies of the assets (the HVAC system) to be paid of the value of the HVAC-IN FULL if and when they decide to sell their home. Some homeowners who had a contract with said scammy HVAC companies have found the hard they need to shell out more money to get out of this “contract” from the same company cheating from them all along.

This is not just unethical but is basically illegal. I recently had an assignment on my Business Law class regarding contracts and how valid contracts are done (at least in the province in B.C) and I believe these kinds of actions fall (obviously) into void contracts due to two (of the five) requirements not being met: First is that there is no consensus about the terms and requirements of the contract. It may be hard to believe (or to prove) that you did not agree to a contract if you signed up to it but misrepresentations about any of the terms can void the contract. The second idea that I think makes this invalid is the fact that these are “unconscionable” or unreasonable requirements.

In the end, the report gives a dire warning and heads-up to avoid these scams:

“In the meantime, experts say the best way to protect yourself is:

  • Don’t sign up for big purchases on the spot.
  • Always read the fine print before signing. 
  • Ask to see credentials.
  • If you already have a contract, check your land title to see if there’s a lien on your property. It’s better to fight it now than find out later.”
    (Marchitelli, R., Pedersen, K., Sadle, G., 2022)


References:
CBC/Radio Canada. (2022, January 14). Hidden cameras capture deceptive tactics used to sell overpriced HVAC contracts | CBC News. CBCnews. Retrieved March 5, 2022, from https://www.cbc.ca/news/canada/hidden-cameras-capture-deceptive-tactics-used-to-sell-overpriced-hvac-contracts-1.6313723