HomeServe and its subsidiary, Home Emergency Insurance Solutions, sell contracts for a variety of home repairs, promising to send qualified technicians anytime and pitching peace of mind. But some of HomeServe's mailings have given consumers anxiety instead.
In November, the Massachusetts attorney general alleged that the company's offers of contracts to repair electric and gas lines and equipment looked too much like utility bills and misled consumers about repair costs and just who was responsible for repairs.
HomeServe didn't admit wrongdoing but paid $75,000 as part of a settlement agreement and agreed to disclose clearly in future promotions that its services are optional and not from a utility. (In 2010 the company had to change its mailings in Kentucky and Ohio after attorneys general in those states found that the company suggested its service was a mandatory utility fee. The company denied wrongdoing and paid $7,500 to Kentucky and $10,000 to Ohio.)
Wannabe bills aren't the only way some home-repair and service-line plans confuse consumers. In December the Illinois Commerce Commission ordered Nicor Gas, a utility, to stop promoting Gas Line ComfortGuard, a pipe-repair plan offered by its unregulated affiliate Nicor Services, to customers who called the utility. The commission said the utility failed to provide pertinent information. The Illinois attorney general said that although the plan cost about $60 a year, most gas-leak repairs cost less than $50 for consumers without the plan. "Given the facts," says Robyn Ziegler, a spokesperson for the Illinois attorney general, "ComfortGuard is not a necessary product or a good value."
Bottom line. Putting money in a fund for a rainy (or leaky) day is smarter than paying $100 a year for potential service. Keep in mind:
Photo: Steve McAlister/The Image Bank/Getty Images
A version of this article appeared in the May 2012 issue of Consumer Reports magazine with the headline "Think Twice About Service-Line Repair Plans."