Door-to-door water heater firm facing $7M in penalties for misleading customers

The federal Competition Bureau says a subsidiary of Just Energy Group Inc. has agreed to pay $7 million in penalties. (Just Energy Group / Twitter)

OTTAWA - The federal Competition Bureau says a subsidiary of Just Energy Group Inc. (TSX:JE) has agreed to pay $7 million in penalties, restitution and other costs related to complaints over its door-to-door water heater marketing practices in Ontario and Quebec.

The settlement with National Energy Corp, which operates as National Home Services and Services aux foyers, follows a finding by the bureau that sales staff were misleading customers about their identity and the purpose of their visits.

During the investigation, the bureau said it became aware of thousands of complaints received by other organizations, including the Ontario Ministry of Consumer Services, the Better Business Bureau and the Office de la protection du consommateur in Quebec.

Under the consent agreement signed by National and Just Energy Group Inc., National will pay $1.5 million in restitution to all current National customers obtained through door-to-door marketing since July 2008 in the form of a credit on their water heater rental bills.

It will also pay a $5-million administrative penalty and an additional $500,000 towards the bureau's investigative costs.

The agreement also prohibits National from misleading consumers into believing their existing water heater is unsafe or that it is eligible for a no-cost upgrade and requires the implementation of a corporate compliance program.