Concerns raised about furnace company's sales and repair practices

A CBC News investigation has raised questions about the repair practices andsales tacticsof Furnasman's One Hour Heating and Air Conditioning,one of Winnipeg's biggest furnace retailers.

The investigation was prompted by several complaints CBC News received about the company regarding advertising claims and work performed by service technicians.

As a result of the investigation, Manitoba Finance Minister Greg Selinger, who is also theminister for consumer and corporate affairs, said this week that the provincial Consumer's Bureau has been instructed to conduct its own investigation of Furnasman.

'We have discovered that in three recent instances, technicians' efforts to adequately diagnose a furnace operating issue were not in full compliance with either our own or the industry standard.' Furnasman company statement

"These kinds of stories serve the public interest because they bring to light practices that Manitobans should be aware of and they allow the consumers bureau to ensure those practices don't continue and make corrections in the public interest," Selinger said.

CBC News asked three homeowners, during the month of April, to call Furnasman for a cleaning of their natural gas-burning furnaces. Industry experts were then hired including a retired inspector with the Manitoba Department of Labour to double-check the work done by the company.

In all three cases, the Furnasman repairmen said the homeowners needed to buy new furnaces. The experts, however, said two of the three furnaces did not need to be replaced, and that problems Furnasman had identified were actually not present.

The third furnace, which was 43 years old, legitimately needed to be replaced because of a fire hazard. Instead of telling the customer to call Manitoba Hydro to shut off the gas, the technician launched into a sales pitch that played on the customer's fear.

"I'm not trying to come across as Joe Sales Guy, seriously, honestly. I've been at Furnasman 20 years and I've seen your furnace," he said. "I know you need to upgrade that thing. It's like a time bomb."

Furnasman claims to be the biggest player in the Winnipeg market, selling about 940 furnaces a year, which equates to a multimillion-dollar business. The company told CBC News it performed 8,900 service "episodes" or service calls in 2008 alone.

Hidden cameras used for investigation

The inspection visits were captured on hidden camera video. In one case, a repairman says he discovered a crack in the heat exchanger that poses a health risk because of the possible emission of carbon monoxide.

"People go to the hospital because of this I've seen it about 20 times this winter," he said.

CBC's experts, however, thoroughly inspected the heat exchanger and found no cracks. Despite the age of the 16-year-old furnace, they said it was in good condition and not dangerous.

"I'm glad they found there was nothing wrong with it because I don't want to put out $7,000," said homeowner Bryan Davies. "It's the way it should be done in the first place."

In a second inspection, the Furnasman repairman said there was a danger furnace flames would melt electrical wires, and suggested no parts were any longer available for the 28-year-old furnace. The experts said there was no safety danger, and confirmed that spare parts were in fact still available for the furnace.

'We are committed to correcting these gaps'

Furnasman issued a statement responding to thetests, saying they would try to do better in the future, but insisting that there was no intent to mislead anyone.

"We have discovered that in three recent instances, technicians' efforts to adequately diagnose a furnace operating issue were not in full compliance with either our own or the industry standard," the company said.

"We are committed to correcting these gaps by increasing our focus and investment in technical training as well as the on-site management inspection that is required to ensure our clients receive the highest industry standards of service, quality, safety and technical diligence," Hugh Cook, general manager of the company, said in a statement.

Furnasman also advertises deep discounts on furnaces they say are worth $7,172. But other Winnipeg retailers sell the same furnaces for $4,000 installed. Furnasman has acknowledged that they do not ever sell the furnace for the purported price of $7,172.

"I don't think we would ever actually really sell it at $7,172," said Dennis Chiasson, the company's sales and marketing manager.

He said"it's an advertised price, and we discount from there."

Customer filed lawsuit

In 2006, Sheila Scanlon bought a furnace from the company, lured in by that ad. At the time, the furnace was a $4,616 unit, offered for free if the customer paid for the installation. The customer also had to purchase an air conditioner and pay for its installation, to get the deal.

Scanlon was also promised a savings of 25 per cent for two years on her heating and cooling bills. If she didn't experience such savings, Furnasman promised it would double the difference.

'"[They were] just totally condescending in a way. [They] made the impression that I didn't know what I was talking about.' Sheila Scanlon

In the end, with taxes, she paid $6,600. When she found she wasn't saving 25 per cent on her bills she brought it to the company's attention.

"[They were] just totally condescending in a way," she said. "[They] made the impression that I didn't know what I was talking about and if it was a really cold winter compared to the years before, that you couldn't be expected to be held to that standard. I said it doesn't say anything about that in your guarantee."

So she got the proof from Hydro and after more than three months of haggling she decided to take Furnasman to court. Soon after she filed her suit in January 2008, the company called her to settle out of court and cut her a cheque for $1,458.

"I don't understand a company advertising something to bring in customers, and then not following through on it. And I'm just not a person that can accept a person that won't follow through and being accountable for what they're saying they're going to do," Scanlon said.

An interview was requestedwith Cook, whose signature and image is on the ads, but was instead referred to Chiasson.

He said the delay in the company acting on Scanlon's request for reimbursement was due to the fact her savings "were not immediately reflected due to the timing of Manitoba Hydro's budget billing change process."

Once that was apparent, "One Hour compensated Ms. Scanlon promptly according to our iron clad guarantee," Chiasson said.