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Post date: November 3 2015

A.G. Schneiderman Announces Settlement With Company That Deceptively Solicited Consumers To Enroll In Service Plans

HomeServe Mailed Solicitations That Appeared To Come from Consumer’s Utility Company Or Municipality

Company Must Reform Business Practices, Pay $100,000 for Restitution, Penalties And Costs, And Establish $100K Fund To Provide Free Repairs To Qualifying Low-Income New Yorkers

Schneiderman: My Office Will Work To Root Out Companies that Use Deceptive Marketing Practices To Encourage Customers To Make Purchases

ALBANY – Attorney General Eric T. Schneiderman today announced a settlement with HomeServe USA Corp, headquartered in Norwalk, CT., which markets a variety of service contracts to residential property owners, including contracts covering consumers’ external water, sewer and electrical lines. The settlement, which also binds HomeServe USA Repair Management Corporation, an affiliated company that arranges for repairs and service to consumers who are covered by HomeServe service contracts, requires HomeServe to make a number of reforms to its business practices.

“Consumers have the right to know who they are dealing with and what they are being offered before they agree to spend their hard-earned dollars,” Attorney General Schneiderman said. “My office will continue working to root out companies that use deceptive marketing practices to encourage consumers to purchase goods and services.”

According to the Attorney General’s investigation, HomeServe mailed solicitations for its service plans to consumers throughout New York State that prominently featured the logo of the consumers’ water, sewer or electric utility and created the false impression that the service plan was being offered by the utility company.  Other HomeServe solicitations created the false impression that the solicitations were formal notices from the consumer’s municipality and did not adequately disclose either that the service was optional, or that it was being offered by HomeServe. Some solicitations also failed to disclose certain exclusions and eligibility requirements, including for example, that multi-family homes or those in excess of 5,000 square feet were not eligible for certain types of coverage.  The service contracts typically range in cost from approximately $64 to $128 per year. Approximately 20,000 New York consumers have enrolled in various HomeServe service plans after receiving solicitations.

The Settlement prohibits HomeServe from misrepresenting, directly or by implication, that HomeServe is affiliated with the consumers’ utility companies or any other entity, or that the service plan is being offered, sponsored or endorsed by the consumers’ utility company.

The settlement also requires HomeServe to clearly and conspicuously disclose in all solicitations

  • That enrollment in the service plan is optional;
  • That HomeServe is independent from both the consumer’s utility and any municipality or other governmental entity; and
  • All material terms, exclusions and eligibility requirements of the service plan.

The settlement also requires HomeServe to clearly and conspicuously disclose to consumers before they enroll in a service plan when and at what interval they will be charged for any renewal, and to mail consumers a notice before renewing any contract.

HomeServe must also pay $100,000 for restitution, penalties and costs and establish a $100,000 fund, which will be used to provide free exterior water service line repairs to low-income New Yorkers.   Consumers in need of a repair can obtain an application and additional information about the program, including qualification criteria, program terms and conditions, and FAQs by visiting their website here or calling 844-754-0002.

Consumers who believe they may be entitled to a refund should notify the Attorney General’s office. Consumers can file a complaint online or obtain a complaint form at Consumers can also call the Attorney General’s consumer helpline at 1-800-771-7755.

This case was handled by Assistant Attorney General Amy Schallop, Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General Karla G. Sanchez.