I-Team: Before Spending Thousands Of Dollars, Beware Of Furnace Scam

BOSTON (CBS) - When Jennifer and Jeremy Reese moved into their Boxford house, they inherited a heating and cooling maintenance service contract from the previous homeowner.

In February, the couple made an appointment for what they figured would be a routine checkup for their furnace. They were wrong.

"The technician was in the basement for about 20 minutes and then came upstairs and said, 'We have some bad news,'" Jennifer recalled.

The technician informed her the furnace had a cracked heat exchanger. It's a serious problem that can allow dangerous levels of carbon monoxide to escape into the home.

"When I heard that, I was scared," Jennifer, a mother of two young children, told the I-Team. "That's a silent, odorless killer."

The technician then cut off the gas supply, disassembled parts of the furnace, and informed the homeowner the heating system couldn't be used until it was replaced. He also placed a red tag on the system reading, "Defective. Do not use."

The bad news came in the middle of winter. Jeremy said a salesman contacted him within 30 minutes of the diagnosis to discuss replacement options. A new furnace would cost thousands of dollars.

"It felt like my family was either going to freeze or they were going to die from carbon monoxide if I didn't get a new one," Jeremy expressed.

However, something about the situation seemed a little suspicious.

The Reeses also own a rental property in Haverhill. Just weeks earlier, a technician with the same company had offered the exact same diagnosis after checking the furnace in that townhome.

With both elderly and young tenants living in the rental property, the Reeses quickly spent the money to replace the furnace.

But this time, Jeremy decided to get a second opinion.

Mike Kingston, the service manager with Topsfield-based Stocker Home Energy Services, found no problems with the Reese's furnace. He showed the I-Team how he ran a camera inside the heat exchanger to look for evidence of any cracks.

Kingston then reassembled the furnace and measured for any carbon monoxide readings.

"I ran a full test on. Everything checked out okay and it's running fine," Kingston said.

The service manager said technicians should not take furnaces apart to prevent homeowners from using them. Instead, he said they should turn the power off, inform homeowners about the danger, and get them to sign an acknowledgement form.

"That way, they can still run the system to keep the pipes from freezing in the winter until it can be replaced while they stay somewhere else with friend or family," he said.

Kingston said technicians should almost always be able to show homeowners visual evidence of a crack. In the Reese's case, the worker showed Jennifer a video on his cell phone. When Jeremy asked to also see the evidence, he said the company could not produce it.

News articles and online discussion forums indicate the potential scam has surfaced around the country. However, consumer protection agencies in Massachusetts seemed largely unaware of the problem and could not provide the I-Team with examples of similar complaints.

"It's rare, which is a good thing," Kingston said. "But it's frustrating. You don't want to get a bad reputation in this industry that people are trying to cheat homeowners and convince them to buy something they don't need."

A spokesman with the Massachusetts Office of Consumer Affairs & Business Regulation said it is a good reminder to get a second opinion before buying a new system. He also said homeowners can contact their utility companies if there are concerns about carbon monoxide levels.

The Reeses wonder how many other homeowners have needlessly purchased a new furnace out of fear.

"I shed a couple of tears and wondered how someone could do that to us," Jennifer said. "As far as we know, we are a few thousand dollars richer because we didn't fall for it."

Ryan Kath can be reached at rkath@cbs.com. You can follow him on Twitter or connect on Facebook.