At the beginning, Crystal Sheffield thought it sounded like a pretty good deal.
A sales representative from a company called Provincial Smart Home Services came to her house in Madoc, Ont., roughly 200 kilometres east of Toronto, and talked her into a $26,000 loan to pay for a UV water filter, a reverse osmosis water system and smart home equipment, like a new thermostat.
The sales representative told her she would qualify for rebates that would help pay for it, Sheffield said in an interview.
“As a single mom of two kids, it was the middle of the pandemic … things were a lot tighter,” she said. “I thought, ‘This is great.'”
She alleges the salesperson never told her that the bi-weekly payments on the loan through a third-party lender — which started at about $65 — would more than double to nearly $150 two years later.
“I don’t have that kind of money,” she said. “My groceries [are] one of those payments.”
Her phone calls to the company went unanswered, and her emails bounced back. Eventually, she refused to pay, which hurt her credit score. Now, she said, she can’t renew her mortgage — in part because of her refusal to pay the loan — and she’s had to put her house up for sale.
Sheffield is one of 80 people interviewed by CBC’s Marketplace who feel victimized by Provincial Smart Home Services. Many say the company convinced them to buy HVAC and other equipment they didn’t need by promising government rebates that never came and savings on energy bills that never materialized.
Together, their contracts are worth $1.5 million, leading many to ask what the government is doing to prevent questionable heating, cooling and ventilation companies from pressuring consumers to sign major contracts that don’t deliver, as tactics have adapted since Ontario banned door-to-door sales of household heating and cooling equipment in March 2018.
“We reached out to Consumer Protection Ontario,” says Joao Garcia, one Provincial Smart Home Services customer, of the provincial body that investigates consumer complaints. “They just basically said we don’t have enough for a case.”
Hear from dozens of Canadians about their experiences with Provincial Smart Home Services
Provincial Smart Home Services and one of its corporate directors are now facing charges under the Consumer Protection Act, connected to unfair practices and failure to deliver valid contracts.
However, Bethanie Pascutto, a lawyer with the Advocacy Centre for the Elderly, says those charges often have no teeth.
“There just aren’t any punishments that match the crime,” she says. “People are being let off the hook if they’re being punished at all.”
Marketplace has learned that even when the government has identified wrongdoing, charges don’t necessarily stick.
Previously, CBC’s Marketplace and Go Public investigated Ontario Green Savings, a company that misled consumers into signing contracts for HVAC equipment that they didn’t necessarily need, using Notices of Security Interest (NOSIs) to coerce customers into paying. Similar to a lien, a NOSI is registered against the title of a home and stakes a financial claim to equipment in it, which can make it difficult to sell the home or refinance your mortgage.
The CEO of the company at the centre of that investigation was Saeed Torbati. He, and various HVAC companies he is affiliated with, were charged with more than 100 offences under the Consumer Protection Act in 2022. The offences ranged from failing to refund consumers payments and engaging in unfair practices.
Following those charges, he was added to Ontario’s Consumer Beware List, a public, searchable database that lists charges against companies or directors.
Undisclosed settlement
Since then, however, the Ontario government made a deal with Torbati, dropping the charges and removing his name from that database.
As part of the agreement, Torbati agreed to pay an unknown amount of restitution to his previous victims. Though Marketplace requested details from the Ministry of Public and Business Service Delivery and Procurement about how many customers got restitution and how much they were paid, we were told that information was not available — or was only available via a Freedom of Information request.
Torbati, meanwhile, said the agreement with the government was “not an indication of any misconduct,” and it was only meant to ensure customer satisfaction.
In June 2024, the Ontario government banned the use of NOSIs.
The lack of transparency in these kinds of settlements, according to Pascutto, allows companies to continue to take advantage of consumers by making it difficult to look into a company’s past conduct. It’s also unclear whether Torbati has to provide proof that he’s meeting his part of the agreement — because the details of such deals aren’t publicly disclosed.
Paralegal John Robinson, who says he receives hundreds of calls about HVAC companies like Provincial Smart Home Services and Ontario Green Savings, calls the secrecy around these deals “baloney”.
“We’re not policing these people who are involved,” he said.
As long as questionable business practices make money, companies will continue to take advantage of the lack of hard-hitting penalties, Pascutto said. The government needs to increase fines for breaching the Consumer Protection Act, she said.
Right now, the maximum fine for directors is $50,000 and $250,000 for companies. But Pascutto said it’s rare for businesses to actually face these types of penalties.
“When they do face consequences, these consequences are minimal,” Pascutto said of violators. “The penalties need to be significant and they need to be enforced.”
The minister responsible for overseeing Consumer Protection Ontario, Todd McCarthy, did not agree to an on-camera interview. The Ministry of Public and Business Service Delivery and Procurement – the ministry responsible for Consumer Protection Ontario – tells CBC’s Marketplace that “businesses are prohibited from engaging in unfair practices, including misleading representations” and that the Consumer Beware List “highlights businesses with enforcement actions related to consumer protection laws.”
When asked what measures the ministry will take to better protect consumers – like those of Provincial Smart Home Services – in the future, they did not respond to the specific question.
The owners of Provincial Smart Home Services declined a request for an interview. Instead, a statement said the company has shut down, that “client claims stemming from buyer’s remorse are not valid” and that staff ensured each client understood the details of their contracts.
