Several consumers and contractors are second-guessing their decision to transact business with Choice Home Warranty (“CHW”). The New Jersey based company has received complaints, not only from their customers, but also from independent contractors that provide
services for CHW and the New Jersey Attorney General’s Office. Many consumers lured in by CHW’s advertising claims that they provide “fast & dependable home warranty service from local technicians” are up in arms that their claims are denied by CHW using misleading
and deceptive tactics.
In a suit filed by the New Jersey Attorney General, CHW is charged with false advertising, violating the terms of its contracts, and other deceptive practices. Although the company advertises that they will quickly respond to consumers’ service requests
by promptly dispatching local technicians, in truth CHW has made it difficult and, in some cases, impossible for consumers to receive services. The suit explains that the company commonly denied claims for reasons such as failure to provide maintenance records,
although contracts did not require such documentation from the consumers; failure to properly maintain appliances and systems; and pre-existing defects, even in cases where the technician informed CHW otherwise. In some instances, CHW never provided specific
reasons for denial.
Contractors do not appear to fare any better in their dealings with the company. A number of technicians that sign up to provide services on behalf of CHW are also upset because they have not been paid. In a complaint filed with Business Consumer Alliance
(“BCA”), one technician explains how his small business has suffered due to CHW’s failure to pay for work the contractor did and out-of-pocket expenses he incurred. Even after filing a
complaint and being promised by a CHW representative that payment would be forthcoming shortly afterwards, the contractor has yet to receive payment. This is the sentiment shared by several other professionals that have been left in the lurch by CHW. There
are even
social media pages that detail similar experiences of others affected by CHW’s practices.
Home warranties are usually offered when purchasing a home and helps protect the homeowner from major home system and appliance repair and replacement expenses. The contracts typically cover repair or replacement of a home’s major systems, such as heating,
air conditioning, electrical, plumbing, and major appliances for renewable one-year terms. When services are needed, the homeowner is often at the mercy of the warranty company to dispatch someone to address the problem. The homeowner typically does not have
any control over who is hired to provide service.
Kim’s advice: Don’t rush to buy that service contract or home warranty. Before you purchase a home warranty:
- Obtain a reliability report from BCA on the business which provides background information, complaint history, and consumer reviews.
- Research the company’s reputation and, if possible, speak to clients that have used the company to get feedback about their experience.
- Review and understand the contract so you are aware of what is covered, how to file a claim, and other provisions.
- Take the following into consideration:
- The price of the warranty
- Are there deductible costs
- Whether you have control of who provides the repair work
- The level of coverage
- Check with your state’s department of insurance to verify licensing requirements for home warranty companies or service contract providers.
- Consider foregoing home warranties if the home’s systems and appliances are fairly new.
If you do purchase a warranty, be sure to keep all paperwork, receipts, and maintenance records in a safe place.
Contractors who are considering partnering up with a home warranty company should also thoroughly research a company before agreeing to do business with them and ask their colleagues if they have experience with a potential company. Always review the agreement
and make sure terms of payment and other provisions are understood and in writing.
While home warranties are generally used to provide peace of mind, they can end up being a major headache. Doing your research and carefully weighing the pros and cons of a service contract can help avoid the predicament many of CHW’s clients and partners
currently find themselves in. Visit the BCA website for a report on
Choice Home Warranty, which currently maintains an F rating.
About the Author:
Kim Burge is Business Consumer Alliance’s Vice President of Business Practice. For media inquiries, Kim may be reached by phone at (909) 835-6094.
About Business Consumer Alliance:
Business Consumer Alliance (BCA) is a non-profit company which started in 1936. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint
information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is
to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization
and who agree to abide by high standards of ethical business practices.