Don't be fooled by the furnace company offering a red-tag special

Katie Burger of St. Paul said she still gets angry about the time a heating contractor red-tagged her 25-year-old furnace.

The contractor disabled it a year ago because of a cracked heat exchanger that could leak dangerous carbon monoxide into her home.

With several space heaters on loan from the contractor, she decided to get a second opinion. That technician told her there was nothing wrong with the furnace, and it is still working today.

"It was a scam," she said. "I was shown pictures on an iPad of a cracked heat exchanger and proposals from $3,678 for a secondary heat exchanger to $6,700 for a new furnace."

With subfreezing temps kicking in this week, furnaces will be working harder and even more consumers deciding to schedule a tune-up.

The number of complaints about red-tagging and other potential scams is rising, according to Becca Virden, spokeswoman for CenterPoint Energy.

"We're seeing them a few times a week on social [media] now. Previously it was every couple of weeks," she wrote in an e-mail. The Better Business Bureau of Minnesota and North Dakota received about 400 complaints in the past three years for red-tagging, overcharging, high pressure sales techniques and unsatisfactory work.

Eighteen months ago, an HVAC industry group comprised of heating contractors and the BBB created tips for choosing a contractor that included language about responding to a red-tag situation. So far, one company, MSP Plumbing Heating & Air, has a "No Rating" or NR while the BBB investigates further.

"This theme of red-tagging did pop up with some regularity," said Dan Hendrickson, communications manager for the BBB in an e-mail. It is hoping for a one-on-one meeting with the company for clarification on some of MSP's responses to the action, Hendrickson said.

Eric Swanson, general manager at MSP responded in an email, "We are working with the BBB to better understand our Red Tag process and the training that goes into safely identifying and red tagging furnaces need to be replaced. In the past three years, MSP has serviced over 15,000 furnaces and we have less than 1 percent who have been unhappy with the red tag decision of our technicians. We take the safety of our customers & their families very seriously, if other companies are giving second opinions and deem a furnace with a crack, hole or excessive corrosion to be safe, we would strongly advise homeowners to seek out two or three additional opinions within the market."

HVAC contractors have the right to disable a furnace because they can be held liable if they find an unsafe furnace operating in a home and don't take adequate protections.

Ideally, carbon monoxide levels in a home should be zero parts per million, but most CO alarms don't sound until levels of 50 to 70 PPM are found.

Rick Welter, president and owner of Ray Welter Heating in Minneapolis, said red-tag scams aren't frequent in the Twin Cities, but his company hears complaints about the same three or four contractors. "Don't panic if someone shuts it off," he said. "There are companies like us, Schwantes [Heating and Air Conditioning] and others that will do free second opinion checks."

Welter said if a cracked heat exchanger is leaking carbon monoxide into the air, it's serious, but generally not an imminent life or death situation. "If there's really a crack, it should be replaced within a few weeks," he said. Cracks cannot be repaired.

Homeowners should always get a second opinion if they're told a crack exists. Burger later learned that the picture her first technician showed her on an iPad was not even from her furnace. "He was only here for 45 minutes and later I was told it would take two hours of labor to even get a look at the exchanger."

Welter said that lowball furnace tune-up offers for $59 or $69 can sometimes be a way for a company to gain access cheaply only to claim the furnace needs repairs or even replacement. HVAC companies that also repair appliances sometimes offer to take 40 percent off a washing machine repair bill if they can also take a look at the furnace or water heater, he said.

"We get a lot of people call us who've had their furnaces red-tagged," said Rodney Johansen of Kath Heating and Air Conditioning in St. Paul. "Most of them are using it as an opportunity to sell someone a new furnace."

Consumers can ask when making a tune-up appointment if the company pays its techs on commission or straight salary. A service technician working on commission can be more likely to find problems, Welter said.

Burger signed up for a contractor's service plan for $8 a month with the company that red-tagged her. It included a free annual tune-up of her air conditioner and furnace. She believes that allowed the company more opportunity to find unnecessary repairs.

Virden said that consumers with a service plan from their utility can ask for a free safety check visit. But any service recommending expensive repairs merits a second or even third opinion, especially if a new furnace is suggested.

A furnace with a cracked heat exchanger may not need to be replaced in its entirety. Only the heat exchanger may need replacing. Some heat exchangers may be under warranty for up to 20 years, but homeowners should verify if the warranty covers both parts and labor. Some may only cover parts. Labor to install a new heat exchanger can be more than $1,500, almost half as much as the cost of a new furnace.

Contractors generally recommend annual tune-ups for furnaces, but Checkbook believes that can extended to two years if the system is newer and has suffered no breakdowns.

John Ewoldt • 612-673-7633