From an air conditioner to a water heater – the cost to repair just about any home appliance can add up. Diane Hatcher knows this. That’s why she signed up for a service contract, hoping to save money. And when a home she rents out had a leaky water heater, she said she thought it would be covered.
“We knew that we had coverage under Service America,” she said. “Our contract can have it fixed or replaced.”
A Service America technician told her tenant the water heater needed to be replaced, but she said she was surprised to learn she had to pay a $225 administrative fee.
“That is what we are questioning, how a company can charge us a fee that we never agreed to and we’re never made aware of,” she said.
But a closer look at the small print on the service contract she signed shows administrative fees and costs to obtain permits can be added. Service America told NBC 6 Responds those fees cover the permit, filing fees, pickup and delivery, postage fees and other city and county fees. But if Diane would have gone to get her own permit, it would have cost her $104, less than half of what she was charged.
“That is what we would call hidden fees,” said Cinthya Lavin of the Better Business Bureau of Southeast Florida. The BBB gets a lot of complaints about service contracts, she said, adding that what you’ll pay hinges on what’s in writing.
“That is why I always advise consumers to be very attentive to what they’re signing,” Lavin said.
And before you sign, Lavin recommends doing the math to make sure a service contract makes sense for you. Or you could take a different approach.
“Just have that money set aside,” Lavin said.
As for Diane, NBC 6 found the city permit wasn’t pulled until after our team called to ask about it – a few weeks after the water heater was installed. The city told us permits need to be issued before work is done, but according to Service America, they are sometimes given leeway to pull permits for water heaters and air conditioners. The company did follow through and got the permit for the water heater.