Deceptive Consumer Advertising and Contract Guaranties


My Complaint: As I was purchasing a home in Oct 2015, I noticed that some of the appliances looked older than others. I was advised to purchase a “Home Warranty”, and purchased one from Choice Home Warranty because they advertised they would cover ALL appliances, regardless of age as long as they were in working order at the time the contract was put in force.

I called CHW June 12, 2017 to report that my AC had failed during an Oklahoma heat wave (90 degree temps and 70%+ humidity). A certified technician came out the next day, inspected the AC and furnace, took some pictures to complete his report to CHW. He informed me that they would make a determination within 24 hours on whether the unit would be covered by their warranty. However, he also offered to replace the outside unit (condensor) within 24 hours if I would just “FORGET” CHW and let him install it and pay him directly. He predicted that in his experience CHW would not cover repairs and accepting his offer would restore AC operation much faster.

CHW finally contacted me on June 16, to inform me that they WOULD NOT cover any repairs JUST AS THEIR LOCAL TECHNICIAN PREDICTED, because they had determined while the AC Compressor had failed, it had failed for other reasons than “NORMAL WEAR AND TEAR” (article 2A of their contract).

I requested to speak with a certified technician who could explain their decision as the customer service rep could only repeat that they would not cover my needed repairs. Louis promised a certified technician would contact me within 24 hours. THIS NEVER HAPPENED.

I contracted with their local service technician to make the needed repairs, which he did within his promised 24 hours. The needed repairs came to $2350.00. When I called CHW to complain they offered to refund my contract free of $378.00 if I would sign a liability release and SHUT UP.

I do not believe this is fair or honest treatment of CHW customers. I am convinced they routinely DECEIVE their customers, especially after reading the following BBB report from the New Jersey Better Business Bureau:

Final Consent Judgment
The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.
June, 15, 2015 NEWARK – Edison-based CHW Group, Inc., which does business as Choice Home Warranty, has agreed to pay the State $779,913.93 including consumer restitution; revise its business practices; and retain a compliance monitor for at least one year under a Final Consent Judgment resolving the lawsuit brought by the New Jersey Division of Consumer Affairs in July 2014 against the company and its current and former principals, Victor Mandalawi, Victor Hakim and David Seruya.
The Division’s Complaint, filed in Superior Court in Middlesex County, alleged that CHW induced consumers to buy the so-called “home warranties” – which were actually service contracts – by stating they offered “comprehensive” coverage. The Division alleged that CHW then used deceptive tactics to deny consumers’ claims, such as denying claims if the consumers were unable to submit multiple years’ worth of maintenance records. As a result, consumers who paid hundreds of dollars for CHW’s “warranties” were required to pay out-of-pocket for air conditioning, refrigerator, or other repairs that were purportedly covered.
The Final Consent Judgment requires Mandalawi, Hakim and Seruya to execute Confessions of Judgment, enabling the State to seek payment from them in the event CHW fails to make the settlement payment.
The Judgment also requires CHW to retain and bear the costs of a State-approved compliance monitor. For up to two years, the compliance monitor will oversee CHW’s, Mandalawi’s and Hakim’s compliance with the terms of the Judgment, all applicable New Jersey consumer protection laws, and CHW’s internal policies and procedures. The compliance monitor will provide quarterly reports to the Division.
CHW, Mandalawi and Hakim also are prohibited from using the following business practices, among others:
Representing that consumers who purchase residential service contracts will never pay for repairs to home systems or appliances.
Representing that they will assign technicians to service consumers’ claims, unless they are able to make such assignments.
Requesting maintenance records or other similar documents from consumers in the initial review of their claims.
They are also required to adopt the following business practices:
Clearly and conspicuously disclose in advertisements that they offer service contracts, which are not warranties.
Disclose that they may make payments to consumers instead of replacing their home systems or appliances.
Provide, upon a consumer’s request, a written explanation for a claim denial.
For a period of one year, resolve consumer complaints within 60 days of receiving such complaint from the Division, or have the complaints forwarded to the Division’s Alternative Dispute Resolution Unit for binding arbitration.
Seruya assets that his affiliation with CHW ended in May 2013. The Final Consent Judgment requires that he notify the Division if he ever operates a business in New Jersey, moves an existing business into New Jersey, or otherwise sells service contracts or any other merchandise in New Jersey.
For more information go to…


My Demand: I want the needed repairs covered as promised.

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