Tanning salon owner up in arms over Toronto Hydro’s deposit terms

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WATCH ABOVE: $4,000 Toronto Hydro deposit not returned to small business owner. Sean O'Shea reports.

When Mary Stantis took over a Don Mills tanning salon five years ago, she discovered it’s not cheap to set up a Toronto Hydro account. Price tag: more than $4,000.

She says she was told the utility would hang on to her deposit for five years to make sure she was credit-worthy. Then, she’d get it back.

But when the time came this spring to start applying the $4,000 towards her monthly bill – which hovers around $1,700 – Stantis got a bill shock. She wasn’t getting her money back after all.

“I’m furious,” Stantis told Global News, describing multiple reassurances by Toronto Hydro that the money would be coming back.

READ MORE: Toronto Hydro billing practice being reviewed by Ontario Energy Board

Based on conversations with customer service representatives, she didn’t pay her recent monthly bill in the belief the money would be deducted from the deposit. Instead, she got a reminder and then a disconnection notice.

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“How can you disconnect my power when you have an outstanding deposit?” she asked, in frustration.

After escalating the issue to senior supervisors, Stantis discovered Toronto Hydro planned to keep her money for another two years.

“They told me it was a five-year term, now it’s a seven-year term,” she said.

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Utilities are legally allowed to charge security deposits in order to guarantee payment, under a set of rules set out by the Ontario Energy Board.

“We encourage any customer who is concerned with the practice of their [utility] to contact the OEB and allow us to look into their individual circumstance,” said Lars Hansen, media relations specialist with the Ontario Energy Board, which regulates electricity providers.

In this case, Toronto Hydro admits it erred by placing Urban Tan in a business category requiring a five-year deposit when it should have been seven years.

“Unfortunately, the customer was mistakenly identified as belonging to a different class of commercial account, which has a five-year deposit timeframe. The customer falls into the seven-year deposit category due to their electricity use,” said Tori Gass, spokesperson for Toronto Hydro.

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READ MORE: 76-year-old Toronto Hydro customer has hydro back thanks to Global News viewer support

Small business advocates say the high cost of electricity is putting a severe strain on businesses.

“It’s a challenge on top of all the other financial woes that businesses are forced to face,” said Julie Kwiecinski, Ontario director of provincial affairs for the Canadian Federation of Independent Business.

“There’s clearly a problem with communication on the part of the hydro provider. They need to be clear from the outset what the deposit is. People should be aware of what their policies are,” she said.

Stantis says she was misled — and the utility should refund the deposit immediately.

READ MORE: High hydro prices threaten Ontario ice cream maker

“If they had told me it was a seven-year term initially, I would have been angry but I would have gotten over it,” she said.

Many private businesses, faced with a similar mistake, would stand by their original statements, and in a case like this, return a deposit to the customer.

But Toronto Hydro is not prepared to do that for Stantis. Instead, Toronto Hydro’s Tori Gass says they are looking to pre-empt the situation in the future.

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“We’re going to review how this situation occurred and will look to find ways of improving our customer service so this situation doesn’t happen again,” she said.

— With files by Alana MacLeod