For Immediate Release - November 23, 2011

HomeServe, Provider of Gas and Electric Repair Services, Agrees to Improved Disclosures in Solicitations

Resolves allegations of deceptive advertising

BOSTON - A utility repair contractor that allegedly sent more than 900,000 misleading solicitations and renewal notices to Massachusetts National Grid customers has paid $75,000 to the Attorney General’s Local Consumer Aid Fund to address allegations of unfair and deceptive advertising.  HomeServe must also clearly disclose in future advertisements that it is not a part of National Grid, and make clear that its services are optional, and not a utility bill that is required to be paid.

“With another heating season upon us, Massachusetts residents require and deserve clear and fair information about the repair services available for their heating and electric systems,” said AG Coakley. “Consumers must receive forthright information from service providers in order to make informed choices.”

The solicitations were mailed by HomeServe to customers of National Grid in late 2010 and early 2011.  HomeServe, an independent company headquartered in Connecticut, purchased National Grid Energy Services, an unregulated affiliate of National Grid USA that offered service contracts to National Grid consumers to repair gas, electric, heating, and water lines and equipment in certain areas of the state.

In the settlement, filed in Suffolk Superior Court, AG Coakley alleges that HomeServe mailed solicitations and renewal notices to 946,000 National Grid customers in Massachusetts which gave the impression that the notices were from the utility itself, and that they were a utility bill and not an offer to provide a repair service.  The AG’s Office alleges that the advertisements also gave false impressions about the cost of repairs and about whether the repairs were the responsibility of the utility, the homeowner, or the homeowner’s insurance company.

Under the terms of the settlement, HomeServe must clearly disclose in future advertisements that it is not a part of National Grid and all of the material terms and conditions of its offers, and make clear that its services are optional, and not a utility bill that is required to be paid.  If HomeServe fails to abide by these terms, it will be required to pay a $50,000 civil penalty.  HomeServe has also paid $10,000 to cover the costs of the Commonwealth’s investigation.

The Attorney General’s Local Consumer Aid Fund (LCAF) is used to fund 31 consumer mediation offices around the Commonwealth, which accept consumer complaints from the public and seek to mediate those complaints with merchants.  Last year, the LCAF funded services successfully mediated more than 13,000 disputes and obtained recovery for consumers exceeding $6.4 million.

This matter was handled by David Monahan, Deputy Chief of Attorney General Coakley’s Consumer Protection Division, and Assistant Attorneys General Sandra Merrick, John Geary, and Charlynn Hull of Attorney General Coakley’s Energy and Telecommunications Division.

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