Middlesex County Company Accused Of Using Deceptive Tactics To Deny Consumer's Warrantee Claims

The New Jersey Division of Consumer Affairs filed a complaint against Middlesex County based company Choice Home Warranty Inc. (CHW) for allegedly using deceptive tactics to deny consumer’s repair claims that should have been covered under the companies “home warrantee” service.

According to a press release from the New Jersey Attorney General’s Office, CHW allegedly enticed consumers to spend hundreds of dollars to purchase “comprehensive” home warrantee coverage, which turned out to be a residential service contract, and then denied their claims for repairs and replacements.

To date, the Division of Consumer Affairs has received 116 complaints from various states and 902 complaints have been filed with the Better Business Bureau.

CHW is also accused of not paying $21,690.92 worth of invoices from 16 different technicians hired by the company to do repairs.

“The Division alleges that Choice Home Warranty refused to provide the basic services that consumers were paying for, and pocketed the money paid by consumers,” Division of Consumer Affairs Acting Director Steve Lee said in the release. “Such deceptive practices will not be tolerated in New Jersey.”

The defendants, Victor Mandalawi, Victor Hakim, and David Seruya, all presumed to be from Brooklyn, allegedly accused customers of not properly maintaining the product or claimed the product had pre-existing defects to get out of honoring the warrantee.

As a result, consumers were forced to pay out-of-pocket for repairs on household items such as air conditioners or refrigerators that should have been covered under the warrantee.

One consumer claims CHW asked her to show 12 years worth of maintenance records before they would fix her air conditioning unit, according to the release.

The customers who were granted repairs found that either technicians would not do the work for CHW due to unpaid invoices or the technicians that did do the work were unlicensed or uninsured.

Customer’s also said CHW would offer “buy-out” options at costs much lower than the cost of the repair would have been.

“This company’s alleged false advertising and flagrant violations of the terms of its residential service contracts affected consumers not just in New Jersey, but in at least 25 other states from here to Nevada, according to the Division’s consumer complaints,” Acting Attorney General John J. Hoffman said in the release.

“It is time to bring these alleged violations to a close and prevent further harm to consumers,” he added.

According to the release, CHW paid defendants Mandalawi at least $2.6 million from Jan. 2011 to Sept. 2013, Hakim at least $3.7 million between Dec. 2010 and Sep. 2013, and Seruya at least $2.1 million between Jan. 2011 and April 2013.

The State’s Complaint, filed in Superior Court in Middlesex County, ultimately requests that the Court, among other things, find that the defendants violated the Consumer Fraud Act and Advertising Regulations; order defendants to pay consumer restitution; declare CHW’s residential service contracts with consumers to be null and void; and impose civil penalties, according to the release.