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The Ontario HVAC Scam

A scam involving home utilities and door-to-door marketers has been around in Ontario since 2017. This fall, it is back in full force. Beware of the Ontario HVAC Scam!

How Did the Courts Address This Consumer Concern? Some homeowners took scammers to court. The 2020 Skymark Finance Corporation v Toraman Small Claims Court decision is a success story, wherein a financing company sued an immigrant couple to recoup over $8,600 in unpaid rental fees for a water filter and ended up losing their battle in court. On the facts, the couple successfully argued through their representatives that Skymark used “unfair practices” in consumer transactions, which violated Part III of the Consumer Protection Act. While reviewing the contract provisions and its assignment, the court determined that “the door-to-door salesman engaged in both false, misleading or deceptive representations and unconscionable representations.” 2 Further, the court found that “the contract [was] unenforceable and rescinded.” 3 The court dismissed Skymark’s claim. As a result, the financing company ended up paying back the rental fee that the immigrant couple plus the fair market value of the unit itself, roughly $1,200. The company received possession of the rental equipment in exchange for the payments made to the consumers.

What is the Ontario HVAC Scam? Representatives of rental companies, turned scammers, go to people’s homes and use high-pressure tactics to get them to rent HVAC, electrical equipment, or plumbing at extremely high prices. Afterwards, they assign equipment rental contracts to a financing company which registers a notice of security interest or another instrument against the house. This is essentially a lien. Initially, homeowners have no idea there is a lien against their property. When they try to sell or refinance their home, their lawyer uncovers the lien and tells them about it. Homeowners are shocked when they are informed of the lien against their homes. Homeowners need to pay out the financing company to remove the lien. When the financing company sends out a predatory high payout statement, the homeowners are in yet for another shock. Despite this outrageous demand, it may not be worth it for the homeowners to take the financing company to court.

Who Gets Targeted in This Scam? Scammers target vulnerable homeowners such as older people or newcomers to Canada. As previously noted, they use deceptive and high-pressure sales tactics. They often need to pay several thousand dollars when the retail value of a unit is around $2,500. Since going to court will cost the homeowner more than paying out the lien, homeowners usually stomach the bill.

What has the Ontario Government Done About the Scam? The Ontario government has made it harder to register liens against properties in the province. It also made selling certain home equipment door-to-door illegal. Unfortunately, these changes have not curtailed the scam. Scammers just switched to equipment which is not banned by the new regulations. In the end, there is a gap that the Province still needs to address because the financing companies continue to benefit from obtaining new customers and their lien information.

How to Prevent This Scam There are some precautionary measures that you can take to prevent this scam. For one, be careful before signing any contract. Make sure that you read it thoroughly and understand what you are signing. Before renting any equipment, please do the math to ensure that you are better off renting when buying it. If you find out that you are a victim of the scam and that there is a lien on your home, contact a lawyer to do a title check on your home and assist you with removing the lien.

Contact Us This material is for informational purposes only and should not be relied upon as legal advice. To book a consultation with Buzaker Law Firm regarding a contract or agreement review, please get in touch with us at or (905) 370-0484.

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