Sears Home Services bankruptcy leaves customers in the lurch

An elderly B.C. coupleneeding roofing work done says they thought they were hiring one of Canada's retail giantsand now they are caught ina financial mess that could cost them thousands of dollars.

Doreen and Frank Porta say that for 60 years they had trusted the Sears brand, so they went to Sears Home Services when their home needed a new roof and paid the $11,000 bill with their Sears card.

A year ago, Sears Canada sold its home services division to a separate company that retained the brand name Sears.

Ten months later, that company went into receivership, owing more than $8.9 million to nearly 600 companies and tradespeople and up to $1.8 million to roughly 1,800 customers, like the Portas.

"The roof was finished on December 10th and that's the date that all the money went on my credit card to owe them," Doreen Porta said.

"Then, the Sears Home Service, we were advised on the 13th they had gone bankrupt."

Though the Portas paid Sears Home Services through their Sears card, no one paid the roofer or the supplier.So both companies each put a lien on the house.

You just kind of feel you are left in the lurch here.- DoreenPorta, a former Sears customer

"Roofco says 'Hey, we're going to get our money from somewhere' and they've elected to take a shot at us," Frank Porta said.

Roofco has put liens on four other houses in B.C., and is owed a total of $42,004.97 for work it didthrough Sears Home Services, according toreceivership documents.

The owner of Roofco told CBC News over the phone that it placed the five liens very reluctantly, and only because it seemed unlikely that the company would ever recover the money through the receivership process.

Cedar Grove Building Supplies the other company with a lien on the Portas' house is owed$272,515.06through various contracts with Sears Home Services, and hasput liens on about 50 other houses in B.C.

The Portas say they were hoping to sell their house soon, and now feel stuck.

"You just kind of feel you are left in the lurch here," Doreen said.

"Nobody's going to buy a house with a lien on it," Frank said. "It's got her wound up [and]had her in tears yesterday. That's gotta stop."

"You can't sleep. It's just very, very upsetting," she said.

Sears brand damaged,marketing expert says

A business analyst at Simon Fraser University says the ordeal is a marketing disaster for Sears.

"By hanging those customers out to dry who trusted the Sears name, they're killing their brand equity. That's going to hurt store sales down the line," says Lindsay Meredith, a professor of marketing at the Beedie School of Business.

Meredith saysthe solution for Sears Canada is as simple as writing a cheque.

"Are you really going to throw out all that brand equity you spent decade upon decade building, and throw that out over an $8,000,000 bill?" he asked.

But for the Portas who are expected to continue to pay off the Sears credit card chargethe damage is already done.

"I wouldn't buy anything from Sears in the future," Doreen said.

Sears Canada responds

Sears Canada has not offered to pay the tradespeople and suppliers who are owed money from Sears Home Services but, after CBC News contacted the company, a vice president called the Portas to offer help.

In a written statement, Sears Canada said it will "work with them to ensure they are relieved of covering the lien on their home... Sears Canada has been working closely with the receiver."

The company also said it would "stand behind all warranties" for work done by Sears Home Service.

CBC News has also learned that con artists have been calling customers who were named as creditors in public documents published as part of the receivership process.

A fraud alert posted online by the receiversays that it has received reports that people are posing as agents ofPricewaterhouseCoopersor Sears Home Services andasking for credit card information in order to offer refunds.

In fact, neither company is calling customers to ask about credit card information.

The Receiver is asking the customers to be vigilant about giving out their personal information over the phone.

Statement from Sears Canada sent by email to CBC News onMarch 13:

Thank you for reaching out to us regarding the purchase made by Mr. and Mrs.Porta to SHS Services Management Inc. (SHS) with whom the Portas contracted for their roof.I am glad to hear that the Portas roof was installed to their satisfaction.

SHS entered receivership in December of 2013.Since that time Sears Canada has been working closely with the Receiver, PwC, to ensure jobs were completed to customers satisfaction.In this case, while the work has been completed and the customer is making payments for the work, the installers were not been paid by SHS.

Sears Financial credit cards are managed through Chase Card Services, and the payments the couple is making are with Chase, for the services that were rendered. The Portas would be expected to continue to make those payments.

In addition to working with the Receiver on all customer contracts that were made with SHS, Sears is standing behind all warranties, regardless of which company did the actual installation.

I understand that Mr. and Mrs. Porta have expressed interest in selling their home, and this situation in and of itself should not prevent them from proceeding.Sears Canada will work with them to ensure they are relieved of covering the lien on their home should they accept an offer.