The company allegedly used deceptive tactics to sell its so-called “warranties” – which were actually residential or motor vehicle service contracts. It also refused to respond to consumer claims for the repair or replacement of items covered by residential contracts. As a result, consumers paid up to $2,400 per year for coverage that, according to the Stanley Warranty website and other advertisements, were supposed to provide “100 percent” cost reimbursement for the repair or replacement of covered items. However, many customers ended up paying out of pocket for repair claims that Stanley Warranty ignored or refused to honor.

“We allege Stanley Warranty was responsive to its customers only when taking their money and signing them up for contracts that allegedly turned out to be deceptive and hollow,” Acting Attorney General John J. Hoffman said. “This is our second action this year against so-called home ‘warranty’ companies that advertised comprehensive coverage for home systems or appliances – but then stonewalled consumers who tried to obtain the coverage they’d paid for. Any consumer who is tempted to enter into such a contract should check whether customers have filed complaints against the company offering the contract.”

Division of Consumer Affairs Acting Director Steve Lee said, “Stanley Warranty advertised that its service contracts will ‘reduce your costs, reduce your stress, and reduce your frustration.’ In reality, the experience was expensive, stressful, and frustrating for consumers when the company allegedly refused to honor its contracts.”

The State’s Complaint, filed by the Division of Law on behalf of the Division of Consumer Affairs, alleges violations of New Jersey’s Consumer Fraud Act, Service Contracts Act and Advertising Relations, based on the following:

This is the first action filed by the Division alleging violations of the recently enacted Service Contracts Act.

Investigator Brian Morgenstern, of the Division of Consumer Affairs Office of Consumer Protection, conducted this investigation.

Deputy Attorney General Mark E. Critchley, of the Consumer Fraud Prosecution Section within the Division of Law, is representing the State in this action.

The Bergen County Office of Consumer Affairs also assisted in this matter.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint online with the State Division of Consumer Affairs or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

####