Orlando,Fla. — Watch out for a letter that says your water heater is at risk. It looks like it came from the power company. It's really a Florida business that wants to sell you warranty protection.
Danny Andrews thought he was opening a power bill. "It says Progress Energy." It had the logo, but the letter didn't come from Progress Energy. And it warned Danny about a problem he did not have. It read, "our records indicate that the water heater---may be at risk." And he needed to protect his family.
(Todd Ulrich) "Did it catch your attention?" (Danny Andrews) "Yes it did. How did they know." Danny 's hot water tank is just two years old so it's not at risk. It's powered by gas not electric and Progress Energy doesn't even sell gas. In the smaller print he found the letter actually came from a south Florida company called Home Service USA. It's endorsed by Progress to sell hot water warranty protection.
Home Service wanted to charge 6 dollars a month on his power bill. "That's completely wrong, I just don't care for that at all," said Danny.
We showed the letter to the Florida Consumer Action Network, a utility watchdog that questioned why Progress Energy endorsed a company selling coverage few customers would ever need. "They send information out to scare people to buy something they really don't need," said Lonnie Thompson.
We found this Home Serve USA has been in trouble before. Just last year two states took action against them for the way it sold repair warranties. Attorneys general in Ohio and Kentucky claimed marketing letters appeared to be from utilities and were unfair and deceptive. Without admitting guilt Home Services paid penalties and made changes.
(Todd Ulrich) "Should Progress Energy be doing business with that company?" Progress Energy spokesman Tim Leljedal, "we found it has A rating with the BBB...and they have extensive experience in this area."
Progress said it can't comment on other states' action but it reviews all marketing letters first so no one is misled.
Danny Andrews doesn't think so. "I think they're just trying to make more money. They don't care about my water heater."
Home Service says it's offer is fully disclosed and it has thousands of satisfied customers who have used the warranty.
WFTV
