Worthless Warranty? Customers say they paid for coverage they couldn’t count on

MEMPHIS, Tenn. --From fine print in contracts to customer service fiascoes, the NewsChannel 3 investigators uncovered hundreds of complaints about home warranty companies filed with state regulators.

Frustrated and fed up with the claims process, one Southeast Memphis couple turned to WREG for help.

The NewsChannel 3 Investigators got results for them, plus found ways to get coverage without paying the cost.

For nearly a decade, Freddie Hicks says he paid for what he thought was protection.

"If it`s unfixable, then they`ll replace it for the same value," explained Hicks of what he thought was clearly outlined in his home warranty coverage.

Hicks even circled a section referencing that very point in a booklet from his home warranty company, Total Protect.

So when the Hicks' washer broke down he said, "We called and told them one day that it was the spin cycle was messing up and everything."

Hicks says he figured it would be simple, Total Protect would repair or replace the washer.

That was in early December.

Two months and dozens of phone calls later, the Hicks were still without a working washer.

"We never did get it fixed, the parts still over there."

When WREG visited the Hicks' home in early February, there were still boxes with parts sitting on the kitchen floor.

Hicks said after a service call, one technician ordered parts.

He said another contractor later told him the repair required a different part and more money, because fixing the drum wasn't covered.

"I said if you don`t fix the tub, what part of the washing machine go bad?"

A long time WREG viewer, Hicks reached out to the NewsChannel 3 Investigators for help.

Hicks said, "We called you, and you sent an email then a lady called from Cross Country, not Total Protect, but they`re the same company."

It still took a couple of weeks, but after WREG got involved, Total Protect agreed to replace the washer.

Hicks and his wife bought a new machine.

A day before our interview, reimbursement from the home warranty company arrived.

Hick said to WREG, "We finally got the check."

Hicks was pleased Total Protect finally resolved the issue, but as a long time customer, was disappointed it went that far.

WREG asked, "If you had to describe the overall experience, what would you say?"

Hicks replied, "Terrible."

Unfortunately, Hicks' story is a common complaint from customers with home warranties, no matter the company.

Terri Johnson lives in Missouri.

Through open records, WREG discovered she's one of hundreds of American Home Shield customers who've filed complaints against the Memphis based company with the Tennessee Division of Consumer Affairs.

American Home Shield Complaints (TDCI/Consumer Affairs)

  • 40 complaints-2016-2017
  • 189 complaints-since 2010

The company has a "B" rating with the Better Business Bureau, despite racking up more than 10,000 total customer complaints.

WREG has previously uncovered complaints about American Home Shield regarding warranties and customer service.

A Georgia man recently drove to company headquarters in Memphis to resolve a complaint.

"You just have to do your due diligence and find out about a company...$585 a year, that`s a lot of money to put down on anything and not get the benefits of it."

Johnson says she wound up paying roughly $3,000 to a company on her own for air conditioning repairs, after a bit of back and forth with American Home Shield and some of its contractors.

After the ordeal, Johnson said she decided to cancel her home warranty, but then she said, a retention agent offered a deal.

Johnson explained of the conversation, "How about we pay you what we would have paid if we`d done the work? I said, okay, great. I`ll stay then."

Eventually, Johnson says American Home Shield cut off communication.

She said it wasn't until she filed complaints with regulators in Tennessee, Missouri and the Better Business Bureau that the company agreed to pay roughly half of what she'd shelled out for repairs.

Johnson says she felt like she'd escalated her complaint as far as it could go.

"It made no sense to me to go any further because I didn’t see any better outcome."

However, even with American Home Shield agreeing to pay a portion of the costs, Johnson said she felt like the company didn't live up to its promise.

"I thought it was despicable because that`s not what you had said."

Anthony Giorgianni is an Associate Finance Editor with Consumer Reports, who's written about home warranties.

"If you really want to get one of these things, read the fine print."

Giorgianni's biggest piece of advice is to self insure. In other words, instead of paying a company for the possibility of unexpected repairs, pay yourself.

"Put it in the bank, either in a savings account or dedicated product replacement fund or repair fund."

Cover Major Appliances without Warranty Costs

  • Get extended warranty through credit card company
  • Take advantage of the manufacturer's warranty
  • Don't forget about the implied warranty

"It comes with an automatic thing that says the product ought to do what it’s supposed to do and last a reasonable amount of time," explains Giorgianni.

Of home warranties in general he says, "It is something you can think about and research, but you really have to do your homework on this."

Hicks says after this ordeal, they'll be keeping potential repair money in their own pocket.

"We made our mind up, once this is settled and we're good and things, I don`t think we want them anymore."

For the first time in months, the Hicks' were able to wash clothes at home recently, after getting their new machine installed.

A spokesperson from Total Protect told WREG, "We acknowledge the delays in handling the claim and wanted to make the situation right for them."

An American Home Shield representative said the company reviewed Johnson's claim in detail and listened to call recordings. The statement read in part, "Our customer service representatives made clear that we are not responsible for services we did not authorize. However, they also indicated that we have a process that allows a customer to request reimbursement if using an unapproved contractor."

"We failed to follow up with the contractor and Mrs. Johnson in a timely manner to complete our review and communicate a decision about reimbursement."

Total Protect Full Statement

The response time for Mr. and Mrs. Hicks’ claim is not representative of the high standard of customer service we work hard to achieve. The Hicks’ have been customers for many years and we truly value the ability to serve them.  While the failure on the washer was not covered in their warranty agreement, we acknowledge the delays in handling the claim and wanted to make the situation right for them. The Hicks’ insisted on repair of the washer but after extensive outreach to our network, we could not find a service provider that was able to do the complex repair. The Hicks’ stated they had their own provider that would do the work and we agreed to reimburse them once repairs were completed. We were later contacted by the Hicks’ to instead request the claims credit for the replacement because the provider they found didn’t know if he could complete the complex repairs, which is why we initially offered a replacement. Once we received an intent to purchase from the Hicks’, we immediately processed an expedited claim credit which has since been received.

American Home Shield Full Statement

We take pride in providing our customers with quality service and valuable budget protection. If we fail to meet these expectations, we work to do the right thing and ensure the situation is properly resolved.

We reviewed Mrs. Johnson’s air conditioning claim in detail and listened to the call recordings. Our customer service representatives made clear that we are not responsible for services we did not authorize. However, they also indicated that we have a process that allows a customer to request reimbursement if using an unapproved contractor. They explained that to be considered for reimbursement, the customer must advise the contractor that he/she must communicate with AHS prior to beginning work, and must provide the diagnosis to AHS. Once the work is complete, we review the contractor’s invoice and determine whether reimbursement is possible.

Unfortunately, after this was explained to Mrs. Johnson and an agreement was reached on next steps, we failed to follow up with the contractor and Mrs. Johnson in a timely manner to complete our review and communicate a decision about reimbursement. We regret the delay and frustration this caused and have addressed this failure with the people involved. We have also reimbursed Mrs. Johnson $1,587 for her AC replacement. That is the amount AHS would have paid had she chosen to have a contractor complete the repairs through us.