Thursday, February 4, 2010

Deceptive Marketing Backed up by Enbridge

Ellen Roseman has put out another interesting collection of stories about people caught by the deceptive marketing practices of energy marketing companies. The first story is about a woman who received a cheque for $29.99 that she thought had something to do with a water heater she had changed. Unfortunately for her, she was wrong.

The cheque was from Just Energy and the back said “To enroll, cash this cheque at your financial institution. Just Energy will supply 5 years supply at 33.9 cents/m3 under your natural gas supply agreement and JustGreen free of charge.”

She deposited this cheque without even signing it, and now she has been locked into this contract. The writer estimated that the excess gas charges over 5 years will be about $10,000.

It seems obvious that there is no real contract. She should be able to tell Just Energy to go ahead and sue her, except for one problem: both Enbridge and the Ontario Energy Board are backing up Just Energy. Her gas supply will be cut off if she refuses to pay Just Energy.

This policy seems like absolute madness. It doesn’t even matter what a court of law would say about the validity of this so-called contract. The fact that Enbridge will be the enforcer puts consumers in an impossible situation. I agree with Roseman that this madness has to stop.

11 comments:

  1. Unbelievable. I read your post and was dumbfounded at such a strange marketing initiative.

    I imagine the "genius" that came up with this plan is a fisherman, since they certainly know how to use juicy bait to set a hook in their customers' mouths.

    ReplyDelete
  2. Gene: If such contracts are valid, then I need to start mailing out cheques to businesses with a message on the back saying "By cashing this cheque, you agree to purchase 10 of my son's hand-drawings for $10,000 each."

    ReplyDelete
  3. I think someone needs to contact their member of parliament, then the local papers, and then create their own blog about this one. Nothing like the light of day on "allegedly legal" scams to make the cockroaches scuttle back under the cupboards.

    I said it, these folks are cockroaches! Unfortunately it meants they will outlive all of us and will survive a nuclear blast.

    ReplyDelete
  4. I would have loved to have been a fly in the room when they thought up the cash the cheque promotion. Either the lawyer was tied down with a muzzle on or they kept hiring and firing lawyers until they found one that said it was ok to try that. It really stretches offer and acceptance princples.

    I agree with Ellen that door to door energy re-sales have to be prohibited or a very clear disclosure document given with long cooling off periods (like condo purchases).

    This will get much worse before it gets better. In this economy, sales will do anything to get a sale.

    ReplyDelete
  5. Thicken: If this is going to continue to get worse, maybe we'll eventually have a courtroom explanation like the following:

    "I came to the door too late. My husband had already been duped into handing over a copy of our gas bill. I had only seconds to act before we would be locked into the 50-year Pay-Triple Plan. I had no choice. It was self defense. I shot the marketer."

    I certainly wouldn't advocate such drastic action, but I could see a wrestling matches happen when homeowners decide to try to get some paperwork back when they realize their mistake.

    ReplyDelete
  6. Strange perspective from you on this topic. I get offers in the mail from CIBC and Bank of Montreal(insurance term offers), Bell Canada (internet service contracts) and others offering me an opportunity to sign up for services by cashing the cheque attached to their letter-usually it is a $5 or $10 cheque- isn't this the same thing? In your view Michael, are all of them employing bad marketing practices?

    ReplyDelete
  7. Doug: I would say that, yes, it is deceptive marketing if people who cash such cheques later contact the company to say that they never intended to enter into a contract, and the company doesn't let them out of it.

    ReplyDelete
  8. Doug raises an interesting question. I have never received such solicitations including a cheque, so I'm unfamiliar with them.

    Could it be that the offer is clearly stated in the promotional material? If I get unexpected cheques in the mail, I'm going to be very careful and suspicious. Maybe the victim in this scenario left her guard down?

    ReplyDelete
  9. Gene: I agree that I would be very suspicious of any cheque sent to me that made no sense. However the fact that I cash it is not nearly enough evidence that I understood the implications. In this case, the woman thought the cheque was a refund related to a recently changed water heater.

    If I were to enter into a 5-year agreement for natural gas that will cost thousands per year, I'd definitely want the standard of my acceptance to be a signature on clear documents or equivalent, and not just the fact that I cashed some cheque.

    ReplyDelete
  10. I agree with Gene I think. I believe that if you get an offer in the mail with a cheque like the bank offers I have received, you need to read the letter before you cash the cheque. I think honestly, if someone received a cheque and just cashed it without reading the letter that came with it, maybe the issue is more with the person who cashed it. However if the letter or offer that came with it was not clear about what the cheque was for, then I think that would be a bad practice on the bank or the company sending it. But then as I think this through further, if I received a cheque and the letter didn't clearly tell me what it was for, I would still not cash it or at least I would call the company to enquire what it was for before cashing it. I think it is reasonable to assume that no one sends you money for no reason.

    ReplyDelete
  11. Doug: I think you and I are arguing different things. I think it is possible for both parties to be wrong. Someone who just cashes a cheque without knowing what it is about has made a mistake. The punishment for making that mistake is the hassle of straightening out the resulting mess.

    A company mailing out cheques to get people to agree to a contract is not wrong in itself. However, there is no reason to believe that the supposed contract is valid. The company can control the number of people who cash cheques and then reject the contract (and presumably return the money) by making the meaning of the cheque clear. But this still should not take away the person's right to reject the contract. The problem in this case is that the company is free to be as deceptive as they want because they have a powerful organization enforcing these supposed contracts that have no real evidence that people actually agreed to.

    ReplyDelete