Home warranty wars: homeowners, attorney general fight for stricter practices within industry
HOUSTON – Many homeowners have discovered home warranties are fraudulent.
Jena Goetz understands this firsthand. Her air conditioner went out last summer and she said things got even hotter when the repairman selected by her warranty company showed up at the front door.
“In order to replace (the) coil that is covered under your home warranty, we have to do all this extra work adding up to $1,800,” she said.
Fed up, Goetz hired her own repairman who exposed the unnecessary charges and told her she didn’t need any of the extra work completed.
The bottom line for Goetz surrounding home warranties is simple, “scam."
Home warranties is big business nationwide with millions relying on them. The pitch by companies is that they have the policy holder’s back when things break down.
"The biggest concern I have about this is that people are purchasing this product with an expectation it’s going to be there when they need it and that actually ends up not being the case,” said Rep. Tom Oliverson in an interview with Channel 2 Investigates.
Oliverson oversees insurance in Texas as Vice Chair of the House Insurance Committee.
“It sounded like insurance so we assumed that it was the Department of Insurance but it turns out that it’s not,” he said.
This is the problem for thousands of homeowners: identifying exactly who is in charge of home warranties in Texas.
The Texas Real Estate Commission told Channel 2 Investigates they received more than 1,000 home warranty complaints from 2010 to 2019. However, they admitted they are limited in disciplinary action it can take.
Channel 2 Investigates made multiple interview requests with TREC leadership. No one was made available.
However, Mark Brnovich, the Attorney General for the State of Arizona, is taking up the fight for the little guy.
“Someone needs to sue them,” he said.
Last October, Brnovich filed a lawsuit against New Jersey-based Choice Home Warranty. The company outlines the benefit of a home warranty on its site but admits it doesn’t actually sell home warranties rather service contracts.
Channel 2 Investigates met with Brnovich at his offices in Phoenix and asked him if he views the 33 pages as a lawsuit or as an indictment on the industry.
“To me, that is about sending a message to other companies like this that if you’re going to scam people if you are going to rip them off if you are making misrepresentations, you will be held accountable,” Brnovich said.
“I would not be surprised if you don’t see other AGs taking action,” he added.
This is something Goetz is in favor of as she said the industry needs stricter oversight to protect over home warranty companies.
“I know that I am not the only one," she said. "I know that this is happening every day to all types of people, and I feel bad for the people that are getting taken advantage of.”
The Texas Real Estate Commission is not the only one receiving complaints. The Texas Attorney General’s Office informed Channel 2 Investigates they have received more than 500 complaints since 2010.
If you have a story regarding challenges with your home warranty send an email to: firstname.lastname@example.org.
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