HVAC Scams



Secrets of the Heating and Air Conditioning Industry

This book is dedicated to my wife Amy, who graciously put up with me working all those long hours and somehow managed to keep her sanity. Love you babe!

Also to my kids who created the cover for this book and have always been the most helpful and encouraging little people. Love you Jared, Jude, Joseph, Jillian and Jediah!

© 2015 Jay Dillon All Rights Reserved

Introduction 4

Buzz Words 6

Service Agreements and Tune Ups 9

How Is Your Technician Paid? 13

How Do Companies Decide What To Charge? 16

Permits & Code Enforcement 19

Home Warranties 21

Tricky Techs 24

Helpful Guidelines for Hiring an HVAC Company 29

Conclusion 30

[] Introduction

What is HVAC? It stands for Heating, Ventilation, and Air Conditioning. We have become a nation that can’t live without comfort. We want it to be warm in the winter and cool in the summer. We also want our kitchen exhaust fans above our ranges to remove smoke and odors from cooking and bathroom exhaust fans to remove shower steam and smells from our bathrooms. The HVAC industry is a multibillion dollar business. From new construction and replacements, to repairs and upgrades we need HVAC companies.

Unfortunately, not every company is honest and even good companies have shady employees that will try to extract every cent from you they can. This is called a “nickel and dime” tactic. Maybe you need a part but you also need things you’ve never heard of but take the word of the tech that is at your home.

I have spent the last 23 years working in just about every aspect of the HVAC industry and have seen some of the most dishonest work done to trusting customers. I started out working in HVAC manufacturing as a temporary job on the Condensing Units line. I manufactured them but I didn’t even know what they were, until one day I asked my manager what we were actually making. He said “condensing units”. Of course I had to ask what condensing units were and he said “air conditioners”. Wow, I made air conditioners for one month before I even knew what I was making. My second job in the industry was with a one man company as a tool hander and I learned nothing about how air conditioners or heaters worked. After that I worked for a national home warranty company, then to a company that “specialized” in residential new construction. From there it was another, more respectable new construction company. After many years of learning the ins and outs of how HVAC systems were installed I managed to get a job as a Mechanical Code Enforcement Inspector for a local municipality. At that job I was able to see installations from many different companies and learned a lot about the quality of the jobs for which people were paying. When a company pulls a permit from the city building department to replace a piece of equipment or a complete system they have to declare the value of the job and pay the appropriate fee. Well, I knew how much the home owner paid the company and there were times I was shocked at the quality of work for the price paid.

During the housing crash of the 2000’s I got laid off from my inspector job and had to go back into the field. I got a job as a service tech repairing existing equipment. The company I worked for got most of their business from a major home warranty company. We were only allowed to fix the exact problem even if we found a problem that was going to require another service call. It was a new company ran by people that had no experience in the trade. After 2 years of nearly starving to death because work was slow and getting behind on all my bills, I went back to one of the previous companies I had worked for, this time doing nothing but residential replacements. That was very hard work and we always did our best, but the home owner paid a pretty penny for it. I have spent over 2 decades in the HVAC industry and I’ve seen the good, the bad, and the downright ugly.

The purpose of this book is to reveal the tricks of the trade that are either straight up dishonest or borderline scams. Some of these, most probably, will be things that the average customer wouldn’t even consider or believe.

Some major and minor scams we’ll bring to light:

p<>{color:#000;}. Buzz Words that are intended to make sales

p<>{color:#000;}. Service Agreements and Tune Ups

p<>{color:#000;}. Major Parts with Minor Problems

p<>{color:#000;}. Flat Rate Pricing

p<>{color:#000;}. Permits

p<>{color:#000;}. Disposal Fees

p<>{color:#000;}. Home Warranties

p<>{color:#000;}. Getting What You Pay For (or not getting what you think you are paying for)

p<>{color:#000;}. Tricky Techs

Buckle your seat belts because we’re exposing the information that the HVAC industry doesn’t want you to know. It’s their secrets of massive profits at the expense of honest people.

[]Buzz Words

Someone said a long time ago that there was no such thing as a free lunch. From a quick google search it seems the saying comes from pubs that started offering a free lunch if you bought a drink. Sounds like a winner, but the catch was that it was almost always a salty, dry lunch which encouraged the patrons to buy more drinks to quench their thirst. The extra drinks are what paid for the “free” lunch. Bars don’t have bowls of peanuts sitting out because peanuts and beer are inseparable. In fact, I don’t think I’ve ever eaten peanuts with beer. Folks sit down, order a beer and munch on salty peanuts while chatting with their mates. Next thing you know they are thirstier than when they came in for a drink.

A clever modern version (that doesn’t include pubs or bars) is the yard sale. I’ve been to yard sales that give free popcorn to the kids. The parents think that is great because it gives the kids something to do and it is so nice of the yard sellers. But guess what? Kids munch down salty popcorn and get very thirsty, but don’t worry, the yard sellers have everything covered. They went out to a big box discount store and bought a bunch of sodas and iced them down real good. Maybe they paid 25 cents a can, but they’ll sell them to you or your thirsty kid for $1 a can. Now they paid for the “free” popcorn and made a small profit off the sodas. They say there is a sucker born every minute and I feel there are two people born every minute that will take advantage of the suckers.

Free is the most common used buzz word in almost every industry. I’ve seen the free thermostat with system cleaning offer. These cleanings include blower motor and evaporator coil cleanings (sometimes heat exchangers) and they are very expensive and not included in yearly maintenance cleanings. Maintenance cleanings are mostly hosing down the a/c unit and changing the filter (maybe vacuuming the dust off the heater). Now a thermostat costs the company less than $40 for a good digital one. The system cleaning is almost all labor except perhaps some coil cleaner. I’ve seen companies charge over $300 for a blower cleaning and more for an evaporator coil cleaning. That free thermostat was just the nice looking frosting on a very expensive cake. Even more outrageous is the “free furnace” promotion some companies offer. My mother-in-law saw a commercial for a company that every January offered a free furnace with a complete system purchase and she asked me if that was true. Of course I had seen this scam before and assured her that the company wasn’t giving anyone a free furnace, but how did I know? This is how I first found out about this scam.

Winter is a slow time for HVAC companies in the mid south area, where I spent my time working in the HVAC industry, and sales drop off dramatically. It’s easier to sell a complete system in the summer because the furnace is a part of the a/c system as it houses the blower that distributes the air through the ductwork, but in the winter most of the sales are furnace only replacements. When a home owner needs a new furnace and they see an ad for a “free furnace” it catches their attention. I remember one winter doing more complete system replacements than normal. The company required the installation crew to collect the payment after the job was completed, so we knew how much the homeowner paid for each job. I noticed that the average complete system replacement was around $6500.00 for a certain brand and model that we installed. By January the work had slowed down considerably, but we were assured that sales would pick up during the “free furnace” promotion, and sales did pick up. As we wrapped up the first system replacement that was sold under the “free furnace” promotion I noticed something that struck me as odd. On the paperwork that had the total I was to collect after the job, there was a breakdown of the price. It literally said: Complete system replacement-$8500.00 minus free furnace $2000.00, total $6500.00. I stared at that paperwork and felt disgusted by the dishonesty because it was the same make and model as we had been installing for the same price all year with no extras to justify the inflated price. The furnace wasn’t free for the manufacturer to produce, it wasn’t given to the supply house for free, the HVAC company bought it from the supplier (for about a fourth of the cost of the supposed “free furnace” savings), and the customer got scammed into paying full price while being fooled into thinking they got a free furnace. The sad thing about this promotion is that it works every year to increase sales.

Watch out for thermostat upgrades that promise “energy savings”. Programmable thermostats are great for many applications. People that have strict schedules where they wake up at the same time every morning, leave the house at the same time, arrive home and go to bed around the same time can benefit greatly. Elderly people that stay home a lot aren’t going to see much savings, but a slick tech can convince them using the “energy savings” buzz word. I have a programmable thermostat in my house but we never use the program feature. It has a hold button that makes it work like a manual thermostat. We do that because someone is usually always home. If it gets cold we turn the temperature up, if it gets hot we turn the temperature down. If you decide that a programmable thermostat would suit your needs then by all means get one because they are good in certain circumstances. Don’t set the temperature more than 3 or 4 degrees from your comfort point because on a hot summer day if you set the thermostat to 80 degrees then to automatically drop to 70 degrees when you get home you are in for a few hours of discomfort. It takes a while for the a/c system to cool the house back down considering everything in the house, not just the air, is hot. In cases like this a programmable thermostat can actually cost you money, so use it wisely if you need it.

Another buzz word is “factory trained techs”. Sounds great but usually isn’t true. Maybe they go to a class about a new part that a certain manufacturer comes out with but most of the time it’s a pamphlet handed out at the weekly service meeting about some new product to try to sell. Ask questions about the techs. I’ve worked with people straight out of HVAC trade school that didn’t even know how to put on a thermostat or accurately charge an a/c system. Those are the basic minimums to know and ‘techs’ are being pumped out by the thousands all across the country. They are also being hired in place of more experienced techs that have spent their time learning the trade and have years of experience under their belts. Why? Money. Experienced techs get paid more, techs fresh out of trade school will take minimum wage for a skilled trade. I personally never went to trade school. I learned by doing and asking questions. My first service call was very confusing to me. I had only worked on new construction installs and warranty on brand new equipment. I showed up to the customer’s house and immediately called my boss. I described what it was doing, he told me what to check and we got it fixed. I learned something that day that I never forgot; on the job training is not a bad thing in some cases.

[] Service Agreements and Tune Ups

HVAC manufacturers recommend that routine maintenance be performed at least once a year. A usual maintenance schedule will include a spring cleaning and “tune up” for the air conditioner, while the fall tune up will be for the heater. A major cause of equipment failure is neglecting to keep the equipment clean. Outside a/c units should be cleaned periodically and filters at the heater/air handler should be changed at the appropriate times. Some homeowners are mechanically inclined enough to do these simple cleanings themselves, but most hire a company to do it for them. The tricky part here is the advertising. When you see a commercial for a “$79 spring a/c tune up” you may think that is a pretty good deal, but the fact is that the company makes exactly zero dollars profit charging you that price. Technician pay, gas and insurance on the company truck, the receptionist(s), building expenses, advertising, and many other things need to be paid by the service an HVAC company performs. A service agreement is basically paying a fee up front to have your equipment maintained for a year. It will include a spring visit for the a/c and a fall visit for the furnace. One thing you can count on in the last visit of a service agreement is the tech trying to sell you another year’s service agreement.

I briefly worked for a local company in the maintenance department. My job was to do ‘clean and checks’ for service agreement customers. In the spring the outside a/c unit would be cleaned and the filter checked. Our real job was to up sell something. We were instructed to not only check the outside a/c unit, but to check the furnace and even take a look at the water heater. This was something we would ask the homeowner before we started to make sure they were ok with it and to do it in such a way as to ‘offer extra value’ to the customer. It went something like this, “Hello Mr. Smith, I’m here to clean your a/c and make sure it’s ready for the warm weather coming. If it’s ok with you I’d like to check your heater and water heater just to make sure everything is working properly and operating safely.” Mr. Smith thinks to himself “what a deal! A service on my a/c and they’ll check my heater and water heater also? Wow!”


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HVAC Scams

Discover some of the most underhanded scams in the heating and air conditioning industry. This book exposes the ruthless tactics used to make millions in extra profits by victimizing unsuspecting home owners. Learn how to spot a scammer by asking the right questions, understanding the "upsell" mindset, distinguishing between a tricky tech and an honest service provider, and knowing what you are paying for. Follow these helpful guidelines and ensure a positive and beneficial heating or air conditioning service call. HVAC Scams brings to light the gimmicks that are costing customers money and it will give you an eye opening look inside a billion dollar industry.

  • ISBN: 9781311967114
  • Author: Jay Dillon
  • Published: 2015-11-22 03:40:07
  • Words: 14721
HVAC Scams HVAC Scams