Consumer Traps and Tips #8—Service Contracts

For immediate release: January 20, 2009
Contact: Dennis Moore PBC Consumer Affairs Division, (561) 712-6600

Trap
"I was refunded only $18.32 instead of the full $360." Mrs. C. thought she would save money and aggravation by signing a service contract for the major appliances in her home. Four months later when she requested a service call for her stove, the service technician was rude and provided no real service at all.  She cancelled the contract, expecting to get all her money back. She didn’t realize there was a charge per service call. She also didn’t know that her refund would be pro-rated to a percentage of the unearned part of the contract, which was less the cost of service calls. She was surprised and really upset when she received that small refund check!

Tips
The consumer was unaware of some of the important parts of the contract she signed.  She realized she knew almost nothing about the company even though the salesman was extremely nice.  Most service company contracts include details of what is covered and what is not, and also include terms and conditions with a penalty for early termination of the contract.

• Research service maintenance companies before signing a contract.  Check with neighbors, and contact PBC Consumer Affairs to get a “Business Information Report” about the company. 
• Be savvy. Get quotes from two or three companies and compare them carefully. 
• Take the time to read and review all terms, service conditions, refund/ cancellation policies, and warranty information.  Contracts are written for the company’s benefit, not the consumer’s.   

For more information contact Consumer Affairs at 561-712-6600 (Boca/Delay 1-888-852-7362) or go online at www.pbcgov.com/consumer.