- Associated Press - Monday, June 15, 2015

NEWARK, N.J. (AP) - State officials have settled a lawsuit they brought against a home warranty company accused of using deceptive tactics to refuse consumers’ claims for product repairs or replacement.

The final consent order announced Monday calls for the Edison-based CHW Group, which does business as Choice Home Warranty, to pay the state nearly $780,000, an amount that includes consumer restitution. The firm also will revise its business practices and retain a compliance monitor for at least one year.

The state claimed CHW induced consumers to buy so-called “home warranties” - which were actually service contracts - by stating they offered “comprehensive” coverage.

Officials say the firm then used deceptive tactics to deny consumers’ claims, such as denying claims if the consumers were unable to submit multiple years’ worth of maintenance records.

As a result, consumers who paid hundreds of dollars for CHW’s “warranties” were required to pay out-of-pocket for air conditioning, refrigerator, or other repairs that were purportedly covered.

Consumer affairs officials say they received, directly or indirectly, 1,085 complaints about CHW and its practices from consumers in New Jersey and throughout the country. They had filed the suit against the firm last July.

“We will continue to pursue so-called ‘warranty’ companies like CHW to make sure they live up to the promises they make to consumers.” acting state Attorney General John Hoffman said.

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