LETTER: Don't be taken in - gas marketers in town
To the Editor:
A colorfully dressed man named Raad and his associate were making calls on people’s homes in the 7000 block of 18th Street in Grand Forks last week. When he called on my uncle he said that he was “with the Access people and was there to protect buyers from rising gas prices.”
He said he could give him a guaranteed rated for the next five years. My uncle was skeptical but found the man to be assertive that he knew what he was doing and was very positive about his “good company.”
He wasn’t really high pressure, just assertive. My uncle, who was still trying to figure out who he was, and asked if he was appointed by a politician or what. The man said he was more or less a division of the government. My uncle isn’t certain on the exact wording he used but it was to that effect.
He then asked to see my uncle’s FortisBC gas bill, so he could see if he was “protected or not.” He underlined the words “Delivery charges” on the bill and said that that showed that he was not “protected”.
He made some sketches on the back of the bill that where part of his explanation about how the gas business worked and how prices were subject to fluctuation, which he was there to protect my uncle from. Raad then convinced my uncle to sign their five year Green Residential Price Protection Plan at $6.89 per gigajoule (GJ).
After the man left my uncle had the presence of mind to question whether he had made the best decision and called me. Of particular concern to my uncle was whether this man was in fact a BC government representative.
A fast Google search for Access Gas Services gave me their web page which clearly shows that they are a normal for profit public company, and is most not part of the government in any way.
The rate you pay for gas on you FortisBC bill is broken up into eight different line items, with names like Delivery Charges, Commodity Charges, and Taxes and Fees.
The “protected” rate Raad sold my uncle directly affects only the “Cost of Gas” item, and was 2.3 times more than the current rate.
Fortis BC says: “This is similar to a homeowner locking into a mortgage at a fixed interest rate rather than a variable rate. The amount you pay over the life of the contract can be more or less than what you would be charged by FortisBC.” Typically “you commit to purchasing natural gas at a fixed rate for one to five years” and elsewhere Fortis likens these to cell phone contracts.
With that in mind I wanted to see what the cancelation fees were like. The Access web site indicates it will take at least 30 and more likely in excess of 60 days before you get the first bill reflecting the new rate. By that time you are well is well past the10 calendar day cancellation window, and now early cancellation penalties of almost $700 apply.
An additional concern is possible automatic renewals which have to be addressed within a narrow anniversary window if cancellation is desired by the consumer.
The concept of locking into a fixed rate rather than a variable rate largely comes down to your personal level of comfort when it comes to investments and gambling in general I suppose. I personally distrust guarantees as a marketing tool for the simple fact that any guarantee is only good as the company behind it.
We have all seen far too many large companies, even mega corporations, close their doors and pay out secured creditors and leave everyone else out of pocket.
I would certainly hope that Access is solvent right now, and of course they are quite happy to take their profits by selling you a commodity at 2.3 times the current market rate, but what happens when the market dictates a $10 per GJ or higher rate? What prevents profits from having been paid out as wages and bonuses, or in some other manner siphoned off as we’ve seen so often lately, and the customers without anyone to back the deal they made with the company?
I take issue with people with nothing more than an easily imitated company badge hanging around their neck coming to my door and asking for personal information that gives them everything needed to gain access to my Fortis account and its history. That has the basics of identity theft written all over it.
So was my uncle scammed? Legally speaking the BC law allows companies to market fixed rate agreements. Whether you should be “protected” is up to each individual, but I have to agree with the Vancouver Sun of June 7, 2007 that the average consumer is not anywhere near sophisticated enough to make informed decisions on complicated agreements like these.
Issues such as salespeople posing as government representatives and failing to make the contract crystal clear are unacceptable and need to be brought to the BC Utilities Commission as a gas marketer Code of Conduct complaints.
The above are my personal observations and concerns on the matter and in no way constitute advice, legal or otherwise.
Grand Forks, B.C.