Borough spokesman Michel Lemay said the company was misrepresenting itself.
"It's an abusive use of the city's name to trick people into buying equipment they don't need," he said.
City officials said they received a number of calls last spring from residents asking about the borough's water quality after Aquavie contacted them.
When calls started again this week, the borough asked people to collect as much information as possible.
According to the borough, the company told residents that water testing is offered for free by the City of Montreal.
Some residents were told their water quality was poor after the company completed a test, said the borough.
Aquavie then allegedly tried to sell them water purification equipment to improve it.
Lemay said people have no reason to worry about Montreal North's water quality.
Water company denies any wrongdoing
Aquavie denied the allegations and said all phone correspondence make it clear that the company is in no way affiliated with the city.
Frank Vicino, the director of sales for Aquavie, said he was unaware of the complaints in Montreal North. But he said he has received similar complaints in the past from residents in Montreal East and Laval.
He said those complaints were all a result of a misunderstanding with one worker who was later fired.
"If somebody had a problem with our product and is not happy with it, all they've got to do is just call us and we'll handle it," he said.
Quebec's consumer protection agency said it would only open an investigation if it receives complaints from residents.