Many Brownwood residents have recently been questioning city officials regarding a letter they have received offering protection for property owner’s water lines.
The letter from Home Service USA Repair Management Corp states that it offers insurance for water service lines from the city meter to a residence. Officials state that the letter has wording that seems to be leading residents to think that this is something endorsed by the City of Brownwood; however officials state the city is not involved in any way.
“The City of Brownwood is not involved and does not support this service or company,” stated David Harris. “It has nothing to do with the City of Brownwood and we suggest that people read the last paragraph of the letter (in fine print).”
According to Harris, the fine print limitations really state what he felt to be no coverage.
“I can’t find anything they would cover,” stated Harris.
It was puzzling to Harris that the company would use such small print when there was clearly plenty of room in the body of the letter to use a larger text that the seemingly targeted elderly people receiving the letters could actually read.
Other parts of the letter and program that Harris said were questionable:
- The payment envelope lists a post office box in Austin as the return address. Nowhere in the letter was the physical address of the company noted.
- The somewhat misleading wording of the letter, such as the opening line stating “For Homeowners in Brownwood, Texas” which many residents felt inferred the City was a part of the program.
- The company allegedly markets the program by zip code; however, these letters are specifically addressed to residents’ names and not by “current resident”. The people receiving letters to Harris’ knowledge were only elderly individuals.
On the Better Business Bureau website, a review of the company had several questions and answers about Home Service USA, the parent company of Home Service Texas.
The information provided below may assist you with any questions about the services this company provides. As with any warranty, the BBB encourages you to read and understand what is covered under the terms of the contract before signing.
Q. Is what they are selling actually an “insurance” policy or is it a
“service” policy?
A. Home Service is offering a service contract that provides
homeowners protection against the unexpected cost and hassle of service
line emergencies. As a provider of service contracts, Home Service must
comply with state regulations for service contract terms and conditions
language requirements.
Q. Who would perform the work outside Florida if it is needed?
A. Home Service has established a locally based network of licensed
and qualified plumbing contractors to perform the service work. The
service network is managed directly by Home Service.
Q. How are the contractors selected, and does Home Services USA verify
their licensing, etc.?
A. Home Service conducts a thorough vetting process for all
contractors accepted into the repair network. All contractors are
required to provide the following before they may join the Home Service
network:
1. Evidence of the appropriate trade qualification and licensing to
provide a service within the communities serviced.
2. Evidence of liability, workers compensation and motor vehicle
insurance to minimum levels.
3. Drug screening and state background checks.
A Home Service Network Manager also visits with the contractors to
perform an onsite inspection as well as conduct training. Contractors
who are accepted into the network must also sign an agreement with Home
Service that stipulates performance standards, code of conduct and more.
Our contractors are licensed and pre-selected from your community to
respond to these emergencies. They are paid directly by Home Service,
and the homeowner does not pay a deductible. In addition, we provide
our members with many options associated with a home
repair: from a 24 hour emergency hotline to a guarantee that if they
find their homeowner’s insurance provides the same coverage, we will
refund their money.
Q. Who guarantees the work?
A. Home Service guarantees all repair workmanship for one year.
Q. Is the PA address just for payment processing?
A. Yes, Home Service utilizes the Lancaster, PA post office box address
to receive customer applications for processing.
Q. Does the service agreement cover breaks or bursts resulting solely from the age of the lines, or if it only covers “damage” to the lines? Are there any specific exclusions from the coverage?
A. Homeowners pay a fee of $4.99 a month to ensure that in the event of a water service line burst or break, they will be covered for the costs of a service call, labor and materials up to $3,000 per call. Two service calls can be made per year for a total of $6,000 worth of coverage.
Government Actions listed on the BBB site showed the following:
On February 26, 2010 Kentucky Attorney General Jack Conway and his Office of Consumer Protection announced an agreement with Home Service USA and Home Service USA Repair Management regarding solicitations that were mailed to consumers in several Kentucky counties offering water line repair services. The mail piece generated confusion and numerous complaints from consumers and public utility officials due to its design and wording, which suggested that the service was a mandatory fee imposed by the utility company. Under the agreement, known as an Assurance of Voluntary Compliance, Home Service USA will mail corrective letters to all Kentucky consumers who purchased, or will purchase, water line repair services. The letters will clarify that the service is optional and not required by the consumer’s water utility company or local government. The consumer will also be given the opportunity to cancel the service by notifying Home Service USA within 30 days of the corrective letter and receive a full refund of any monies paid. In addition to the corrective measures, Home Services USA paid a total of $7,500 to the Commonwealth for civil penalties and the costs of investigation.
On April 5, 2010, the office of the state of Ohio Attorney General entered into a voluntary compliance agreement with Home Service USA. Under this agreement, Home Service USA expressly denied any violation of and liability arising out of federal, state, or local law. However, in order to resolve the matter without the need for litigation, Home Service USA consented to enter the Assurance with the State, and the rights of the State to enforce the Assurance. Under these provisions Home Service USA shall refrain from using unfair, deceptive, and/or misleading advertisements, which would violate the Consumer Sales Practices Act, R.C.1345.02 (A) In October of 2009 and early 2010, Home Service USA designed and mailed a solicitation containing unfair or deceptive representations to approximately 900,000 consumers in the state of Ohio. The solicitations were found to be unfair and deceptive in their appearance and may lead the consumer to believe the communication is from a consumer’s local water service utility, when in fact it was from a private entity. The mailings also lead the consumer to believe that they were required to purchase ‘water line service coverage’ when in fact the purchase was optional in nature. Home Service USA agreed to refrain from using unfair, deceptive, and/or misleading advertisements, which would violate the above-mentioned Consumer Sales Practices Act. Under the agreement, Home Service USA agreed to pay the sum of $15,000 to the Office of the Ohio Attorney General for attorney fees and investigative costs.
