Ontario companies accused of 'aggressive' tactics

QMI Agency

, Last Updated: 4:44 PM ET

An Ontario rental business cited in 2002 for its "aggressive" tactics and "unwarranted" charges went right back to its old ways as soon as the 10-year penalty expired, says the Competition Bureau of Canada. The agency has filed an application against Direct Energy and wants the company to pay $15 million in penalties. It filed a similar application against Reliance Comfort Limited.

The two Ontario-based companies, which rent water heaters to homeowners, "frustrate the return process" for customers who try to switch to another provider, the bureau said in a statement Thursday. The "anti-competitive practices" require that customers get authorization to return water heaters, and there are restrictions on when and where they can return the units.

Clients are also subjected to "aggressive retention tactics" and "unwarranted fees and charges," the bureau said.

"These tactics are denying consumers the benefits of competition," interim commissioner John Pecman said.

In 2002, Direct Energy (then called Enbridge Services Inc.) was prohibited by the Competition Tribunal from "similar conduct" but, said the bureau, it re-engaged in these practices in February of this year, when that order expired.

Direct Energy replied Thursday, denying the charges and vowing to "vigorously defend its position" before the tribunal.

The allegations "question certain of Direct Energy's practices and procedures that are designed to inform and empower consumers," the company's statement said. "Such practices and procedures do not inhibit competition."

The bureau is also seeking $10 million in penalties from Reliance.