Action 9: Mailers for water line protection could confuse residents

by: Jason Stoogenke Updated:

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CLAREMONT, N.C. —

Many of you are getting a certain ad in the mail. It's making leaders in two towns so nervous they thought to tell Action 9.
 
The ad is for a company called HomeServe.  It's offering water service line protection.  Apparently, some people -- especially seniors -- think it is from water officials and that they have to buy it.  They do not.
 
Norman Neal got the mailing.  He ignored it, but worries about people like his mother. 
 
"It made me mad that they were trying to do this," he said.  "A lot of people probably saw this and it looks really official."
 
Claremont Manager Doug Barrick emailed Action 9 "The City of Claremont does not endorse or support this insurance coverage and encourages people to truly investigate any mail that they receive posing as city-sponsored." 
 
Bessemer City Manager James Inman said City Hall got roughly 100 calls about this in just one week.  He said the ad is not from the water utility.
 
He's asking the N.C. attorney general to investigate HomeServe. Action 9's covered HomeServe before.  It was the same issue, but with gas line protection.  People complained that the mailings gave the false impression the coverage was part of a utility or the government.
 
At least three states were keeping a close eye on the company, including North Carolina.  Two -- Georgia and Massachusetts -- had even taken legal action. 
 
HomeServe did not admit wrongdoing, but agreed to make its ads more clear, which it did.  The ads now have a disclaimer saying it is not part of a utility or community, and coverage is optional.  The Better Business Bureau even gives HomeServe a respectable A- rating.

For more than a decade, the company has offered homeowners coverage for water, sewer, electrical, HVAC and other home emergencies.  HomeServe has had North Carolina customers since 2008 and tells Action 9 it has about 113,000 N.C. customers currently.

Senior V.P. of Public Relations Myles Meehan emailed Action 9:

"Regarding our letter offering water service line coverage to residents in the Charlotte area and elsewhere in North Carolina, here are a few items I'll call your attention to showing how HomeServe represents itself to prospective customers:

·    Logo with HomeServe service mark
·    Identifying the coverage as optional in several places
·    Providing a website address that goes to a HomeServe site
·    A statement, in the same size and type font as the rest of the front of the letter and in italics for emphasis, indicating that HomeServe is an "independent company separate from your local utility or community"
·    A statement that HomeServe has its corporate office in Norwalk, CT
·    A statement describing who Homeserve is or a Q&A  entitled, "Who is HomeServe?"
·    There is also a "Who we are" statement in illustrated brochures included in most of the mailings

There is no implication that the letter from HomeServe is in any way associated with a city, community or town, or the water department, or carries the endorsement of those entities, or that it is mandatory coverage."