Apr 30, 2014

HRAI Comments on Proposed New Rules for Door-To-Door Sales and Rentals of Water Heaters and Furnaces

HRAI Comments on Proposed New Rules for Door-To-Door Sales and Rentals of Water Heaters and Furnaces
Posted in The Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI) By System Admin On Apr 28, 2014
Late last year the Government of Ontario passed legislation to address the problem of misleading sales tactics involved in door-to-door sales and rentals of water heaters.  Legislative changes to the Consumer Protection Act, 2002 were enacted in December 2013 as part of theStronger Protection for Ontario Consumers Act, 2014.  HRAI applauded the Minister of Consumer Services moving quickly to address a problem that has cast a negative spotlight on the industry because of the unethical behaviour of a few companies.  HRAI even suggested that potential measures should be broadened to include other products sold at the doorstep, since there was mounting evidence that these same unethical tactics were being used to sell furnaces and air conditioning systems.
More recently the Ministry of Consumer Services released a draft regulation consultation document entitled “Door-To-Door Sales: Improved Consumer Protection”.  This document presents the more detailed regulations that will give life to the legislation.  And as happens too often with this type of legislation, “the devil is in the details.”
The rules proposed include an extended cooling off period (to 20 days), a requirement for third-party verification calls to confirm customers’ understanding of the terms of new contracts, and some mandatory new language in contracts.  Unfortunately, while these changes might be needed to deal with certain types of transactions, the proposed new rules, as currently drafted, will apply to all direct sales agreements done in customers’ homes, which will have the effect of significantly complicating the traditional contracting sales process for thousands of HVAC (and other) contractors.
In the consultation document, the term “direct agreement” is defined as “a contract negotiated or concluded in person, away from a supplier’s place of business, a trade fair or an auction.”  Additional clarifications in the document confirm that this type of agreement, as defined by the Ministry, will include the vast majority of HVAC sales in the residential marketplace, since heating and cooling contractors do not typically sell out of an office or retail showroom and almost all contracts are concluded in the customer’s home.
It seems that the Ministry understanding of how the HVAC industry operates is flawed.  Immediately following their definition of “direct sales”, the consultation document claims that “door-to-door sales are the most common type of direct agreement” In fact, most contracts are notinitiated through door-to-door solicitation as this approach is not particularly effective except in very limited circumstances (where vendors of rental water heaters present themselves in as being in some way connected to a regulated utility business).
In a letter to the Ministry dated April 22nd, HRAI submitted that, if this definition of direct agreements is already established in legislation, the scope of the proposed regulations must be narrowed to so that they apply only to transactions resulting from unsolicited door to door sales or rentals. Unless this narrowing occurs, the regulations will cause more harm than good by imposing onerous new rules on a multitude of HVAC contractors who engage in perfectly acceptable sale practices.
HRAI has offered to discuss with the Ministry some refinements to the proposed rules so that they properly target the problem at hand.
For more information, contact Martin Luymes at 1-800-267-2231 ext. 235, or e-mail mluymes@hrai.ca