Tory MHA calls for consumer watchdog and updated laws in wake of HVAC business fiasco
Current legislation 'toothless tiger,' says Helen Conway Ottenheimer
What's the point of having fines, if you've never laid one?
That's what Tory politician Helen Conway Ottenheimer is wondering in the wake of a CBC Investigates story on an HVAC company that appears to have left customers — including one of her constituents — without a promised warranty, and has raised questions about what protection consumers have in this province.
Conway Ottenheimer is calling on the provincial government to strengthen its consumer protection laws and hire an independent watchdog to investigate claims like the one brought to her by a constituent who made a complaint against Atlantic Standard HVAC earlier this year.
"They're failing not only consumers but, in particular, seniors and other vulnerable people ... as of late," Conway Ottenheimer said in a recent interview.
"I think there needs to be significant reforms to the current legislation and that has to happen quickly."
Conway Ottenheimer said she learned more about the consumer protection process when assisting her elderly constituent navigate how to lodge a complaint.
"It's my understanding from people that I've heard from, even my own constituents, that [the Department of Digital Government and Service N.L.] has really been ineffective and not successful in getting justice and getting some remedies for the problems that [consumers] face," she said.
No record of fines levied
Digital Government and Service N.L. Minister Sarah Stoodley had originally agreed to an interview but her department later sent along a statement and answers to questions instead.
The province's Consumer Protection and Business Practices Act prohibits "unfair" and "unconscionable" business practices, but it appears no business has ever been fined for breaking that law.
In an emailed statement, the department stressed that not every complaint constitutes a contravention of the act, and that often complaints can be resolved by working with the consumer and business.
If an investigation finds a business contravened the act, the director within the department can issue a compliance order. That order could result in a business having to compensate consumers or take action to remedy a dispute.
If that fails, the director of consumer protection and business practices can file the compliance order with the Supreme Court of Newfoundland and Labrador.
But the department could not say how often any of that has happened, because it doesn't track compliance orders.
And fines can only be imposed by the court — not the director — meaning it's up to the consumer to proceed through that process themselves.
There's no record of that ever happening. Nor is there any record of any fines being issued, a spokesperson said.
Conway Ottenheimer said the onus should not be on consumers to take the matter to court, and is particularly concerned for seniors who may not be able to go through that process.
In addition to stronger legislation, she wants the provincial government to introduce an independent consumer watchdog.
"[Fines] may exist on the books and the law is there, but if they're not, if it's not being enforced, it's essentially a toothless tiger," she said.
Ontario revamps consumer legislation
Each province differs in the severity of the penalties it can hand out.
Currently in Ontario, the Ministry of Public and Business Service Delivery can impose a fine up to $50,000 for an individual and $250,000 for a corporation, as well as a restitution order and jail term.
"The purpose of any enforcement action by the ministry, including prosecution, is to respond to the risk of harm to the broader public and to deter the supplier and others responsible for that risk from violating the law," said MPBSD spokesperson Stephen Puddister.
That province recently revamped its consumer protection laws, but the changes haven't yet been proclaimed.
Once the updated legislation is brought into force, the department will have the power to double the maximum fines, prohibit businesses from amending, renewing, or extending contracts without clear consent from consumers, offer fairer exit options for homeowners tied to long-term leases or rental agreements for items like HVAC systems, and prohibit businesses from creating "unnecessary obstacles" for consumers seeking to cancel subscriptions and memberships.
WATCH | CBC News investigation into St. John's company delves into a history of broken promises:
Back in Newfoundland and Labrador, St. John's-area businessman Raymond Kalonga owned Atlantic Standard HVAC.
A recent CBC investigation into Atlantic Standard HVAC uncovered a trail of debts and frustrated customers.
Years before he opened shop in Newfoundland, Kalonga operated a separate business in Ontario.
He was recently sentenced to 525 days in jail and handed a fine of more than a half-million dollars in relation to his former company, Canadian Standard Home Services, under consumer protection laws in that province. He is appealing the conviction and sentence.
According to the Crown, Canadian Standard sent door-to-door salespeople across southern Ontario falsely identifying themselves as representatives with the government or other agency.
In the context of HVAC equipment rentals, the salespeople offered free installation. Unbeknownst to consumers, they were signing agreements and were billed as if they had signed new rental contracts.
Kalonga later started Atlantic Standard HVAC in Newfoundland.
Atlantic Standard offered home heating and cooling systems, but stopped answering customer calls last year, leaving consumers concerned they had no access to their promised 12-year labour warranty.
Kalonga recently told CBC News the company grew too big, too quickly, and didn't have the upfront capital or manpower to accommodate the demands.
"When the wheel spins that fast, sometimes control is lost," he said earlier this year. "And, you know, things don't go the way that we aspired for them to go."
One of his Atlantic Standard customers contacted Harbour Main MHA Conway Ottenheimer, for help understanding how to make a complaint.
Conway Ottenheimer wrote to Service N.L. Minister Sarah Stoodley in late January on the man's behalf. He was concerned he couldn't reach Atlantic Standard HVAC or its owner to inquire about the warranty.
According to emails obtained through access to information, staff within the department contacted another company to assist him. But the consumer still hasn't been able to receive his 12-year labour warranty.
"The regime that they have in place is not only ineffective, but it's not holding anyone accountable," Conway Ottenheimer said.
Meanwhile, a spokesperson from Digital Government and Service N.L. said the department is watching what Ontario is doing, and is in the process of reviewing that bill.
Download our free CBC News app to sign up for push alerts for CBC Newfoundland and Labrador. Click here to visit our landing page.
ABOUT THE AUTHOR
