Lawsuit Filed Against Whirlpool and Service Net Warranty over Extended Service Contracts

San Francisco, CA: An amended class action lawsuit has been filed on behalf of a client that alleges that Whirlpool Corporation, which has merged with Maytag Corporation, and Service Net Warranty engaged in deceptive and unfair trade practices regarding the companies' service contracts.

According to the amended class action complaint, when he purchased his Maytag clothes dryer, the plaintiff also bought a three-year service contract that promised to repair or replace the appliance if it failed. The complaint states that it also gave the warrantor the option of "buying out" the contract by either refunding the original purchase price less the amount of claims paid, or replacing the dryer with a comparable product. Instead of refunding the original purchase price or replacing the dryer, the complaint alleges that the defendants told the plaintiff that he was only entitled to a refund for the present value of the dryer, minus the cost of the repairman's visit. According to lawyers representing the plaintiffs, that makes no sense, since the point of buying a service contract is to avoid the cost of repair.

The plaintiff alleges that Maytag, which was subsequently purchased by Whirlpool, and Service Net Warranty, which administers the service contracts, failed to fulfill the terms of the service contract by improperly administering buy-outs. As such, the suit alleges that the plaintiff's dryer buy-out, and buy-outs given to similarly situated consumers, constituted breach of contract, unjust enrichment, and a violation of the federal Magnuson-Moss Warranty Act.

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Published on Jan-11-12