02/01/2013 05:02 EST | Updated 04/02/2013 05:12 EDT

Ontario slow to stop water filtration scam

Ontario's Ministry of Consumer Services has taken few steps to stop an Ontario-based water filtration company using deceptive sales tactics, a CBC investigation has found.

In 2011, Marketplace found Woodbridge, Ont.-based Simple H20 was using bogus scientific tests and misleading claims to sell expensive water purification systems to homeowners.

Marketplace co-host Tom Harrington spoke to a ministry official who agreed that the company used “false, misleading (and) deceptive representations,” but the ministry did not lay charges until December 2012, one month after a follow-up call from CBC.

The ministry filed four charges against the president of a Simple H20 distributor, Ottawa’s H20 Pros. If convicted, he faces penalties for misleading practices and failure to refund within 15 days.

That’s too little and too slow, says former employee Phil Robb.

“I think (Simple H20) should be fined, and I think they should be shut down,” he said. “I think they should have to replace all the money to the people that they have stolen from. Because it is stealing … because their testing is not true.”

Robb was hired by London, Ont. Simple H20 distributor PSC in 2011, but quickly left when his wife saw the Marketplace story exposing the company’s scary sales pitch, which exaggerates the risks and the amounts of chlorine in drinking water.

“They were saying about if you didn't buy one of these machines… your babies are absorbing this chlorine, which leads to all these different kinds of health risks, the cancers, the lung diseases, the kidney failures, all kinds of different things,” he said. Marketplace also found Simple H20 sales representatives use chemical drops to make tap water appear cloudy and dirty.

One London, Ont., customer says a sales rep claimed he was a city employee inspecting water quality.

The consumer services ministry received almost 60 inquiries and complaints against Simple H20 since the 2011 Marketplace report.

Spokesman Stephen Puddister said the ministry has “an ongoing investigation into the company,” but added that “aggressive sales tactics (are) not illegal.”

When asked why the ministry was slow to lay any charges, Puddister said the investigations are a gradual process, sometimes taking as long as two years.

“We do as much as we can in terms of what we have at our disposal and going after the companies, getting retribution back for the consumer,” he added.

He encourages dissatisfied customers to make their voices heard.

“In the meantime, a consumer can continue to file complaints with the ministry,” he said. “All I can say is that we’re committed to looking into everything that we receive from the consumer with documentation. And from there if we have to start a new investigation, that’s what we do.”

Watch Marketplace's episode, Back On The Case, Friday at 8 p.m. (8:30 p.m. in Newfoundland and Labrador).