An Ottawa couple is sharing their buyer beware story and the importance of reading the fine print in contracts, following a shocking price hike and interest rate adjustment for their home furnace financing.
In 2018, Sonya Rawlings and her husband, James, replaced their furnace, hot water tank, and air conditioner, spending $17,000, financed through a company called Provincial Home Assistance.
“The deal was that we would be able to pay $60.95 a month for 10 years and we agreed to that and that was fine because it was only at an interest rate of 2.99 per cent,” says Sonya. “There’s no complaints or anything to do with the service or the maintenance, it’s just the financial part that really kind of complicating things.”
Initially, everything went smoothly, however, in 2022, the finance company was acquired by Simply Group. Rawlings says the monthly cost remained the same and the interest rate did not change.
The trouble began in June 2024, when the loan was renewed by a third company, Financeit.
“Our interest rate jumped from 2.99 per cent to 14.99 per cent and our payment went from $60 a month to $136 a month,” says Rawlings. “It’s a shock. It’s kind of like robbery. It’s more than double the amount we were paying before.”
Closer examination of the financing details revealed the loan’s original 10-year amortization had been extended to 20 years by the second lender.
“In five years, we’ve paid only $800 on the principal,” says Rawlings. “Now it looks like we’re going to pay another almost 20 years and that this will cost us over $40,000, which is unacceptable.”
Retail analyst Bruce Winder calls this situation unfortunate, adding it’s important to pay close attention to the fine print of a loan and, if you are unsure, to seek the advice of a financial professional.
“The company who did this, they’re probably within their legal right, but are they within their moral right?” questions Winder. “But even with the fine print, there’s a lot of clauses in there that sort of give companies the right to do many things that allow them to make more money. You’re really paying interest to get money in the short term to help with your liquidity. If there’s ever a way that you can save up some cash and maybe buy the item outright instead of renting it or leasing it or having extended payment terms, you might be better off, particularly when interest rates are high.”
Winder also notes that not all vendors provide this type of loan, and in some cases will offer more competitive interest rates, given the higher cost of living has more consumers pulling back on purchases.
CTV News reached out to Financeit, but did not receive a response.
The Rawlingses have spoke to customer service representatives but have been told ‘there is nothing you can do about it’, when it comes to the interest rate or lower monthly payments.
The couple says there is an option to pay out the loan penalty-free, but until then, interest accrues daily at nearly five times the original rate.
“I just want Financeit to show me where in the original contract I agreed to any of this,” says Rawlings. “I feel like I’m getting scammed.”Â