Hot water heater rental supplier
Reliance Comfort Limited Partnership has agreed to pay a $5
million fine and to change policies that made it difficult for
customers to switch to a competitor, in a settlement reached with
the Commissioner of Competition on November 5, 2014.
EnerCare Inc, another heater rental supplier that has acquired
Direct Energy Marketing Limited's Home and Small Commercial
Services, has also made a commitment to the Competition Bureau to
change its policies to make the return process easier for the
Reliance To Pay $5 Million in Penalty
In 2012, the Commissioner filed applications with the
Competition Tribunal alleging that Reliance and Direct Energy
engaged in anti-competitive practices by implementing water
heater return policies that made the return process difficult and
prevented customers from switching to competitors. The
Commissioner alleged that both companies used tactics such as:
requiring customers to obtain authorization before returning a
rented water heater;
refusing to deal with other suppliers who return customers'
water heaters on their behalf;
unreasonably restricting when and where water heaters can be
engaging in anti-competitive
retention tactics; and
imposing unwarranted fees and charges on customers seeking to
switch to another provider or terminate their water heater rental
These tactics forced the customers of Reliance and Direct
Energy to continue their rental agreement even if they wanted
to purchase a new water heater or switch to another
rental provider that offered substantial savings, the
Under the consent agreement, Reliance
agreed to pay a $5 million administrative monetary penalty (fine)
and $500,000 for the Competition Bureau's investigation
costs. Reliance is prohibited from engaging in practices
described above and is also required to take steps to make it
easier for consumers to terminate their water heater rental
EnerCare Committed Change Heater Return Policies Following
Direct Energy Acquisition
Following EnerCare's acquisition of Direct Energy in
October 2014, the Bureau approached EnerCare and obtained written
commitments from EnerCare to change its existing return policies.
These commitments include:
no longer requiring customers to obtain an authorization number
before returning a rented water heater;
honouring agreements whereby a new supplier can terminate a
customer's account on his or her behalf and return the old
water heater; and
opening new return depots to facilitate the return of its water
EnerCare was not involved in the investigation and application
against Direct Energy, and has not engaged in any
Litigation Against Direct Energy Continues
The Commissioner's abuse of dominance case against Direct
Energy will continue. The day after a 2002 consent agreement
entered into by its predecessor,
Enbridge Services Inc., expired, Direct Energy implemented
restrictive return policies and unfair charges to consumers, to
make it difficult for consumers to switch to another provider, the
Commissioner alleges. The Bureau is seeking from Direct Energy,
among other things, a $15 million administrative monetary
penalty (fine). The application is scheduled to be heard beginning
on March 2, 2015.
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