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Buyer Beware

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This summer, an estimated 600,000 households in Ontario will be visited by door to door sales for a new rental hot water tank. A new report - "Staying In Hot Water - Consumers Need Better Information" (the "Report") commissioned by The Consumers' Waterheater Income Fund (the "Fund"), finds that contracts for rental water heaters are being signed by consumers who have an incomplete understanding of contract terms and overestimate the extent of possible energy savings.

Data from an Angus Reid Public Opinion survey commissioned for the purpose of the Report showed that about one-third of people who rented water heaters from door to door salespeople believe that energy savings from a new ENERGY STAR® qualified water heater are higher than they really are. "Door to door sales often centre on claims that energy savings with newer tanks may be up to 30 per cent, where in fact Canadian government research shows the savings are typically less than 10 per cent," says Tom Cooper, of the Fund, Vice President Sales and Marketing.

"Deregulation in energy markets has resulted in expanded choice for consumers, in terms of the number of energy suppliers as well as for related products and services" says Will Dunning, Toronto economist, and author of "Staying In Hot Water - Consumers Need Better Information." "Unfortunately, this greater choice appears to be accompanied by marketing confusion and inflated claims."

Consumers are also apparently signing new contracts without reading the fine print. Survey data showed that 60 per cent of Ontarians who signed a contract from a door to door salesperson feel that they did not fully understand the terms of the contract that they signed.

"Door to door water heater contracts can have high cancellation fees, $700 - $1,000 or even more, and many of those signing new contracts aren't aware of this", says Dunning.

Consumers need to be aware before they sign a new agreement and read the fine print to avoid high cancellation fees and a long term contract.

Key Survey Findings:

* Only one-fifth (19 per cent) of people surveyed have realistic expectations of energy savings from ENERGY STAR® water heaters.
* A large majority, 97 per cent of people surveyed, would support government rules or laws that require "plain language" and disclosure of contract conditions.
* 49 per cent of people surveyed aged 55 years or older felt pressured to make a household purchase by door to door salespeople within the past five years.
* 57 per cent of people surveyed were not aware of the 10-day cancellation period in the Ontario Consumer Protection Act.


Be alert during the summer months, and ensure you are thoroughly informed before you sign a water heater contract. Before you open your door, keep in mind the top five "Dos and Don'ts" for door to door sales.

DO

1. Do always ask the salesperson for identification and which company they represent.
2. Do check out the sellers and their business organization by calling the Better Business Bureau before agreeing to buy.
3. Do be wary of high pressure sales tactics. Take the time to consider whether you really need or want the product or service being offered.
4. Do get additional expert opinions/estimates when door-to-door salespersons assert that a replacement product is needed.
5. Do if you feel pressured, ask the salesperson to leave. If you feel threatened, ask them to leave and call the police if they do not immediately comply.


DON'T

1. Don't let the salesperson into your home.
2. Don't show the salesperson your existing contract or monthly bills.
3. Don't sign a contract until you have read it carefully and understand it thoroughly.
4. Don't sign a contract that doesn't explain a specified number of days during which you may cancel a contract with a door to door salesperson. For example, in Ontario, contracts and agreements should contain a Buyer's Right to Cancel under the Consumer's Protection Act section.
5. Don't be seduced by free gifts or "too good to be true" offers.

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