How to be aware: over-the-phone home warranty agreements

Dan Stepp, from Winchester, says he discovered an unfamiliar charge on his mother's bank account statement.

WINCHESTER, Ky. (WTVQ) – It’s important to be aware of entering into agreements with companies over the phone.

Dan Stepp, from Winchester, is the primary caretaker, along with his brother, of his 90-year-old mother, who lives in Somerset and suffers from dementia.

He says that he and his brother rotate what days of the week they stay with her, trying to help provide around-the-clock care.

“When I’m there, she’ll answer the phone and I try to remind her not to give anybody any information,” said Stepp.

He says on December 28, he discovered a $179 appliance warranty charge on his mother’s bank statement from a company based in Missouri. Stepp says he has the power of attorney over her finances and wasn’t familiar with the company. When he asked his mother about the charge, she said she thought it was for her home insurance.

“I feel like I’ve failed in protecting my mother and it really bothers me and much more than $179, I’m looking at all these people out there that’s in the same position,” said Stepp.

He says he’s not sure how the company got his mother’s bank account number, or how she entered into the agreement as there is no written contract he’s aware of.

“We have no clue, we have no paperwork, no agreement, only thing is this happened over the phone,” said Stepp.

When Stepp called the company, he was informed that his mother had to send in a letter to cancel the monthly charge and possibly get a refund, which would take thirty days to process. He says he’s concerned these expensive charges will continue.

According to the Better Business Bureau, it can be typical for companies to provide refunds this way, but to avoid situations like this, it’s best to ask about getting a written contract if you’re thinking of entering into an agreement over the phone.

“Many businesses do offer the ability to enter into a contract over the phone. And if that is the case, you would certainly be able to ask that business if they could send some form of written documentation about what agreement you have applied for,” said Better Business Bureau of Central and Eastern Kentucky Director of Communications Heather Clary.

Clary also says when choosing a home warranty company, there are some red flags to look out for.

“Some red flags to watch out for is a really bad record with the Better Business Bureau of unanswered complaints, or if you’ve tried to get questions answered by the business and are getting very vague answers or no answers at all. Another thing to watch out for is if you’re having trouble getting your questions answered by a person. Those things might be a cause for re-considering because what’s going to happen if you do need them down the road if you sign up? So keep that in mind,” said Clary.

The Better Business Bureau also recommends researching businesses on the bureau’s website if you have any concerns, and to report situations like this to the BBB if they are not resolved through the company.

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