Energy Sales Scams

by Mike Holman

Energy market de-regulation

In Ontario the energy market (natural gas, electricity) was de-regulated a few years ago to introduce competition in the energy marketplace. This has created a lot of problems because the energy resellers use door-to-door salespeople to sell the contracts and many of them seem to be crooks.

The problem

The biggest danger from door-to-door salespersons of any kind is that if they knock on enough doors they will find people who are vulnerable to making a hasty decision – old people, mothers with a young child or two, someone who is sick. All these groups are people who might normally be able to see through the lies of an energy market reseller but sometimes fall prey and sign a contract that they either don’t want or don’t understand.

My experience

Two summers ago I was relaxing on our back deck when someone knocked on our door. It was quite a loud knock and I originally thought it was one of the neighbours who was making some noise. I ignored the noise and kept enjoying the fact that my new little baby was asleep. Then I heard the knock again – this time even louder. Still I didn’t move – until the third set of knocks and I heard my wife who had been sleeping in the front room with our two week old baby, talking to someone at the door. It was only then that I realized someone had been knocking on our door – immediately I was quite annoyed that someone would keep knocking even though we weren’t answering the door.

The trap

Since I knew my wife was in even more of a sleep-deprived zombie state than I was, I quickly went into the house and talked to the person at the door. The man seemed normal enough and had his two kids with him – probably around 10 years old. He asked me if I had received my “discount” on my natural gas bill yet? I said no since I had not heard of any sort of discount. He then asked me to go and get an old gas bill and he would make sure I would get the discount. Now at this point, anybody who has any sort of intelligence would probably start to smell a rat – but given the fact that I was extremely tired and overwhelmed by the new baby – didn’t suspect a thing. While the “suspicious” part of my brain was taking a rare nap, the “greed” brain portion was wide awake and prompted me to listen to the guy and go an find an old gas bill. When I couldn’t find one I returned to the door and asked the guy if I could still get the discount without an old bill. I asked him if he could look up the account number at his office since I thought he worked for my natural gas provider. He said it shouldn’t be a problem and asked me to sign a document he had on a clipboard. On top of the clipboard I noticed quite a few gas bills that he had obtained from my neighbours for their “discount”.

The awakening

I took a look at the paper (I wasn’t completely brain dead) and noticed right away that it was a contract where if I signed I would be agreeing to a fixed rate natural gas delivery for three years. At that point I knew exactly who and what he was and and that he was trying to rip me off. I told him that this was not a discount but a contract for gas delivery. He said no – it’s for a discount on your gas bill and then showed me a table that indicated that his company’s gas charges had been lower (supposedly) then my provider. I even asked him what company he worked for and he wouldn’t say.

The punishment

Had he not had his two kids with him, I think I would have been quite tempted to literally throw him off my porch since I was quite annoyed by then. I was angry at him for waking up my sleeping family and trying to rip me off. I was also a bit angry at myself for almost letting him get away with it. I did tell him what I thought of him and his lies and told him to get lost.

The lesson

I learned that even if you are as sharp as a tack (or like to think you are), it’s important to remember that sometimes your guard is down whether you realize it or not and people like door-to-door salespersons can take advantage of that. It’s also a good idea to keep in mind that older friends and relatives might have more of those moments where they let down their guard so you should talk to them about not signing anything at the door.  This can also apply to people who are looking for charitable donations at the door.  Many of them are professionals who’s job it is to solicit donations so make sure that you be careful with them too.

See another post on this problem.

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{ 107 comments… read them below or add one }

101 Lee-Ann

@ Jay, thank u so much..I had pretty much figured out the name change strategy..awesome advice on this site thanks for confirming ; )

102 Brandy

I had the same sort of thing happen, a few times, the last time I was giving the people a good listen until he started to write my number down on my bill he said he would give back to me. When I questioned him about why he was writing my own number down on a bill I was getting back he would reroute my question and pulled out the application to “get this started”. I took my bill off of his clipboard and said have a nice day! I was rather proud of myself for not falling for it!

103 Erich

I would suggest anyone reading this blog message take it with a grain of salt. I understand the frustration of the situation of a stranger approaching you door to door when your family was sleeping of course. I’d just like to clarify that though the person at the door was obviously misinterpreting himself and lying (despicable and illegal), the contract itself is not necessarily a “rip off”. There are requirements that energy resellers must follow in Ontario, and a responsible reseller company will call the prospect customers with follow-up questions to ensure that the law was followed correctly in obtaining this customer.

As an energy reseller myself, I’d hate for people to read your blog and assume that all energy contracts are a “rip off”. Their purpose is to protect customers from rising energy costs over time, because the retailer purchases large amounts of energy at wholesale prices to provide an alternative to fluctuating prices.

104 dmflash

The last time I chased one of these liars of my front step he had the nerve to ask me for a cigarette lol

105 Peggyc

My motto is “I never do business on my doorstep.” I have been approached by these re-sellers too. When I ask if I can have a couple of days to research and think about it, the answer is always No. They won’t leave literature or a business card. May be a legit business but shady and deceptive practices.

106 Uberjuice

The rep that you spoke to was conducting himself unprofessionally, bringing children along on his rounds and claiming to offer “savings”. I am a commercial energy consultant and find this practise of lying to consumers abhorrent. The fact is that no one has a crystal ball and therefore cannot guarantee savings in a contract. On the other hand, given a fixed rate on a commodity, you WILL win over time, if not immediately.

Some claim to understand markets when they are told that the variable rate on a mortgage is lower than a fixed rate. They are speaking of interest rates which rise and fall. These rates have nothing to do with commodity pricing. Car manufacturers are offering fixed rates on gasoline which beat the average price. Is this still a “scam” when the variable price occasionally beats the price you locked in at? I would lock my price at 95 in a heartbeat, knowing that occasionally I will lose when the price goes down to 88, and win as it goes as high as 130. Each province and U.S. state has a different market and policy. Just be aware that the best prices are reserved for those willing to sign a commitment.

107 barbara

these energy companies are legitimate businesses, at least for the most part. But why must they resort to such sneaky tactics? Why not just come right out and tell the consumer that they want to suggest their company as energy supplier. Then they can give an estimate about what energy through them would cost and the consumer can make a comparison and an intelligent decision to switch if he wishes.
I refuse to do business with any person or company that is so shady. if they will be deceitful in order to get customers, how can I trust them?

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