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Commented By:Jean B.
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Recommended:No
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On:26-Apr-2019
Jean B. says:
Complaint against CHW Group, Inc., doing business as Choice Home Warranty
Policy #: 180514400
Claim #: 73443676
A Choice Home Warranty (CHW) policy is a scam perpetrated by an unethical company that uses false advertising to get customers and knowingly fraudulent misrepresentation to deny legitimate claims. This is substantiated by the 4,815 Better Business Bureau complaints filed against/closed in last 3 years (2,060 closed in last 12 months), the thousands of others reported to other consumer advocacy organizations and government agencies, and the Better Business Bureau’s finding that CHW pays people to file complimentary reports to the BBB and others.
Despite a $780,000 Final Consent Judgment against CHW Group, doing business as Choice Home Warranty, resolving the lawsuit brought by the New Jersey Division of Consumer Affairs in July 2014 against the company and its current and former principals, for unethical, deceptive and fraudulent business practices, CHW continues those same practices on the unsuspecting public. How they are allowed to continue these clearly corrupt practices with impunity is outrageous and cries out for additional law suits and criminal complaints.
I have had two air conditioner claims fraudulently denied by CHW. The first denial in 2017 was due to my inability to produce “proof of preventive maintenance”, after I challenged their misrepresentation of the findings of the technician who evaluated the system. Although the CHW contract does not specify what proof is required, in practice they require documentation from a professional HVAC company that preventive maintenance has been performed. Nothing in the contract requires that and, in addition, their explanation of preventive maintenance on their website/advertisements simply call for ensuring filters are changed, condenser coils are cleaned, etc., which can easily be self-performed by a homeowner. Even the statement by the technician CHW sent out, as well as the statement from the technician from the company that installed and performed service on my systems (and eventually repair it at my expense), who both stated my systems were clean and well-maintained, did not cause CHW to honor my valid claim/appeal. As I was working/traveling at the time, I did not have the time to follow-up on this obviously fraudulent denial of my claim. It simply was not worth my time, as it impacted my ability to do my job as a senior executive of a major corporation, which included a great degree of foreign travel. In addition, the cost of repair ($900) was not worth the cost of retaining an attorney to pursue a judgement against CHW.
In my most recent case, CHW has, once again, knowingly fraudulently misrepresented the findings of the technicians to deny my claim and, once confronted of the evidence of such, changed their reason for denial to yet another dubious reason. Details of this situation are as follow:
On March 31, 2019, one of the air conditioning systems in my home developed a problem that caused it to not cool the zone it was assigned. I filed a repair claim with CHW (Claim # 73443676) and they contacted a local HVAC company, Queen Air Solutions (QAS), to assess/repair. The CHW technician responded and evaluated the system and determined that the compressor needed to be replaced, most likely due to a refrigerant leak from the condenser coils. QAS reported their findings to CHW, who denied the claim, stating, “… the technician submitted details pertaining to your system failure. It has been determined the condenser coil has developed a refrigerant leak which requires replacement. Condenser coils that leak have been exposed to corrosive or acidic materials that have infiltrated the fins and transfer tubes, damaging the integrity of the coil. The acidic agents cause sections of the coil to become corroded and/or rusted, causing the development of pinhole or microscopic leaks. This refrigerant leak is causing the compressor to fail.”
I contacted CHW and told them that I was present when the technician evaluated my system and that their representation of the technician’s findings is untrue in that he had specifically commented to me about the cleanliness of the system and obvious lack of rust or corrosion. He opined that the leak was caused by a failed weld due to vibrations. I requested that CHW provide me with a copy of the QAS report to CHW that was used to render their denial of my claim. The CHW representative stated they were unable (i.e., unwilling) to provide the requested documentation and stated that I would need to get it from QAS. I advised them that I had a right to the documentation they used to deny my claim and that their refusal to provide it impacted my ability to adequately prepare an appeal to the decision. Once again, they refused to provide the requested documentation.
As a result of their refusal to provide a copy of the QAS report to CHW, I did as CHW recommended and contacted QAS. I spoke to the owner of QAS, and discussed the issue with her very thoroughly. She was very forthcoming in providing both the diagnosis and recommended action to repair my system. She stated she had been “thrown under the bus” on numerous occasions by CHW and, as such, had taken steps to ensure she can prove what QAS submitted to CHW. While I can provide much more information concerning this (and will if litigation becomes necessary), the pertinent facts, at this time, include:
Properly Installed – Yes
Rusted – N/A
Leaks - Yes
Unit condition – Fair
Age – 8 years
Rust or Corrosion – None
Mold or Mildew – No
Refrigerant Missing – 3 lbs
Filter Condition – Clean
In addition to the above, QAS reported to CHW that the cause was “Normal use of the system” and that “All systems are VERY clean and well kept”. The failure was identified as “Found leaks at condenser coil”. Further, the report stated that the failure was not as a result of anything I “did or failed to do”.
While it is true that the technician reported a leak at the condenser coil, it is blatantly false that he reported it was caused by corrosion or rust. In fact, the technician and QAS specifically stated in their report/diagnosis to CHW that there was NO RUST OR CORROSION, nor mold or mildew. They reported the unit was VERY clean and well-kept and that the cause of the failure was due to NORMAL USE OF SYSTEM.
Further, the diagnosis of the technician from A-1 Hobbs Heating and Air Conditioning, the company that installed the systems when I built my house and has maintained them over the years, who I called to repair the system after my claim was denied by CHW, also specifically stated he had found no rust or corrosion, and included that as a comment on the repair invoice.
I reported my conversation and findings to CHW, as well as provided pictures of the system/condenser coils that clearly showed no evidence of rust or corrosion. I also sent CHW proof of several years of semi-annual preventive maintenance by A-1 Hobbs Heating and Cooling. The representative from CHW responded that the only reason condenser coils fail is as a result of rust or corrosion and, therefore, there are standing by their denial of my claim. I advised CHW that I would conduct further research and submit an appeal IAW my policy.
As a result of my research, which included conversations with several HVAC professionals, I submitted an appeal to CHW that included, in addition to the substantiated rebuttal of CHW’s knowing fraudulent misrepresentation of the QAS report (which I do have a copy of), a rebuttal of their assertion that condenser leaks are only caused by rust/corrosion. The information I provided to CHW to refute their assertion is as follows:
Although, arguably, the most common cause of AC refrigerant leaks is likely erosion of the metal over time due to formic acid or formaldehyde corrosion, condenser coil leaks are also commonly caused by other factors, to include:
vibrations over time
failure of joints and connections that weaken over time
leaking capillary tube
leaking Shrader valve
rusting accumulators
leaking filter dryers
In fact, some HVAC experts argue that the most common reason a leak forms is as a result of weld joint fatigue, which is what the QAS technician opined was the cause of the leak in my system that caused the compressor to fail.
Once confronted with this information, the CHW representative changed tactics and stated that a failure of a two-year old compressor was not “normal wear and tear” and that, my policy only covers problems resulting from “fair wear and tear”. My response to that was that the proximate cause of the failure of the compressor was a leak of refrigerant from the condenser coil and that the leak was not as a result of rust or corrosion, as clearly evidenced by the statements/reports of both the QAS and A-1 Hobbs technicians. Such leaks and their causes, including leaks caused by rust and corrosion, are universally accepted as “normal/fair wear and tear” by the industry, particularly if the systems are properly maintained (which, as previously stated, I had submitted proof of). I pointed out that the only such cause/condition specifically excluded from coverage in my policy was rust/corrosion, which did not exist with my system.
I also pointed out that while there is no legal definition of “fair/normal wear and tear”, my research found that the definition most frequently used in litigation of these type complaints appears to be that it refers to the “damage that happens through ordinary day-to-day use of the item/system/property, as well as due to exposure to natural forces, such as sunlight and rain, but does not include deterioration that results from negligence, carelessness, accident, or abuse”. The CHW policy did not specify nor define “fair wear and tear” or provide examples of such and, as such, apparently relied on their own arbitrary definition in an attempt to fraudulently deny valid claims, such as mine.
In addition, while the contact specifies “fair wear and tear”, without defining it or providing examples, CHW marketing materials further muddy the water and lead potential customers of CHW to believe the items that do not meet their obviously arbitrary determination of fair wear and tear would still be covered. Case in point: The CHW website, www.choicehomewarranty.com, provides the reader (potential customer) with examples of “Home Warranty Benefits” with CHW. One of the benefits listed is, “Peace of Mind – Rest assured that your home appliances and systems are covered when service is needed, even if it is due to normal wear and tear.” The phrase “even if it is due to normal wear and tear” obviously insinuates the items/systems are covered for other reasons than normal wear and tear. Additionally, in the section titled “Is it Worth it to Have a Home Warranty”, you state, “If you have older appliances or an older home, repairs are far more likely. A home warranty plan is a valuable investment that ensures your home and appliances are always in safe and working condition, no matter how much wear and tear they’ve sustained over time.” Obviously, the key phrase here is “no matter how much wear and tear they’ve sustained over time”, which is self-explanatory and can have no other meaning. These phrases, when compared to the contract, are, at best, misleading and clearly constitute actionable false advertising.
I am still waiting on a final answer to my appeal and, if denied, will file both a criminal and civil complaint for Consumer Fraud against Choice Home Warranty in both New Jersey (where CHW Group is headquarters) and Georgia (where I am located).
In anticipation of CHW’s continued refusal to reimburse me for the repair of my air conditioning system, I have been in contact with the both the State of Georgia Department of Law, Consumer Protection Division and the Attorney General’s Consumer Fraud Division, as well as the State of New Jersey Division of Consumer Affairs, Office of Consumer Protection, and the New Jersey Division of Law, Consumer Fraud Prosecution Section. They have provided me with the information I need to file a complaint for Consumer Fraud against CHW for “knowingly fraudulent misrepresentation”. In addition, although I have not yet retained an attorney to pursue civil litigation against CHW, I have had initial consultations with attorneys in both New Jersey and Georgia who are well-versed in this type complaint and have discussed the possibility of filing a class action law suit against CHW.
I am aware that the CHW contract contains a mandatory arbitration clause, as well as language concerning the filing of law suits, however, CHW’s fraudulent actions in regard to my claim (knowingly fraudulent misrepresentation) allows me to assert breach of contract, which nullifies the subject clauses.
I am also aware of the recent ruling of the New Jersey Supreme Court in the Amanda Kernahan v. Home Warranty Administrator of Florida, Inc. case, in which the court held that the mandatory arbitration clause in CHW contracts is unenforceable due to its “inconspicuous location and confusing, inconsistent and contradictory terms.” In addition, Georgia law (Georgia Arbitration Act) specifically prohibits mandatory arbitration clauses in insurance/warranty contracts.
As such, the “mandatory arbitration” clause in the contract is unenforceable. Further CHW’s breach of contract nullifies any agreement concerning pursuing legal action, damages, etc
As I mentioned to CHW, they screwed me on my previous claim, which I failed to pursue after my appeal was denied because I did not have the time nor inclination to so. However, this time, I will do whatever necessary to get satisfaction concerning my claim, to include filing of civil and criminal complaints and taking them as far as necessary. As a retired senior Army officer/Ranger, it is simply not in my DNA to retreat from a fight. If CHW thinks I will simply drop this case, they are sadly mistaken.
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