From RedFlagDeals – The Great Water Heater Rental Scam
We came across this discussion on the RedFlagDeals forum earlier in the year.
Here is the story of a homeowner just like yourself, who moved into a new house and suffered an all-too-common disaster at the hands of a water heater rental company.
If this sounds like you, the alternative is simple. Give us a call and we’ll give you complete control and ownership of your water heater.
Here’s what happened
“I have owned my current house for 6.5 years. We assumed (I suppose) the WHR when we bought the house – although I’m sure we never signed anything from the rental company (Enercare) & they did not appear to have my name on the contract, but only the previous owner’s.
The water heater is 18 years old. It just started leaking & flooded my basement. In the 6.5 years I have owned the house I have never heard from Enercare & certainly never had any kind of ‘maintenance’ visit. Now they want me to sign up for a new WH & a new rental period.
The terms of the agreement are mind-boggling: basically you pay a high amount for ‘peace of mind’, which amounts to … nothing! Enercare were able to leave an 18 year old WH in place while it earned them $5,000 + over the course of 18 years, perform no maintenance or check-ups on the unit, & take no responsibility for any damage caused by the malfunction of the unit.
The terms of the new contract state that you are obligated to continue paying the rental fee as long as the WH is still functional, & that the water heater is fully owned by Enercare until such time that it no longer works, at which point YOU own it & are responsible for removing it unless you sign up for a new contract.
What a scam!”
What’s the rest of the story?
The Competition Bureau filed applications with the Competition Tribunal against Reliance and Direct Energy in 2012 alleging that they had implemented anti-competitive water heater return policies and procedures that were aimed at preventing consumers from switching to competitors.
As a result of these anti-competitive practices, many customers had little choice but to continue their rental agreements even if they wanted to purchase a new water heater or switch to another rental provider. This is an especially important issue for consumers who wish to purchase new water heaters, instead of continuing to pay rental fees, as there can be substantial savings.
The truth is, you can get out of your water heater rental contract and switch to ownership, which gives you complete control over the maintenance of your water heater and a timeline for making your payments. And one day not too far down the road, your payments end.
You will never pay $5,000 for a water heater worth $2,000 (like the homeowner above and the previous owner probably did).