NARB Recommends Choice Home Warranty Modify Certain Claims for its Home Warranty Service Plans, and Discontinue Others
For Immediate Release
Contact: Abby Hills, Director of Communications, BBB National Programs
301.412.7769 / firstname.lastname@example.org
New York, NY – July 1, 2020 – A panel of the National Advertising Review Board (NARB) has recommended that Choice Home Warranty (CHW) modify or discontinue certain claims regarding its home warranty service plans. The advertising at issue had been challenged by competitor Frontdoor, Inc. before the National Advertising Division (NAD). Following NAD’s decision, CHW appealed most of the NAD findings adverse to it.
As it relates to NAD’s original findings and recommendations, NARB agreed that:
The challenged claim “never pay for covered home repairs again” conveys to consumers that if a specific system or appliance is one that is covered by a CHW service plan, the CHW subscriber will pay nothing further if that item needs repairs. NARB determined that the claim is misleading because there are many coverage limitations, and the claim “if we can’t fix it, we’ll replace it” is false in that CHW may give the plan subscriber a cash payment in lieu of a repair, however, the cash payment may be insufficient to allow a customer to replace the item. NARB recommended that CHW discontinue these claims.
CHW’s claim that its least expensive warranty plan costs “about $1 a day” was unsupported because the actual cost was $1.36 a day, a one-third price differential that NARB concluded is a material difference. NARB agreed that the advertiser should not juxtapose any price claim for a specific service with references to benefits only available from a plan for which the charges are higher.
CHW’s “you can save thousands” and similar claims are misleading, both when made by the advertiser directly and when cited in a testimonial, because there was no evidence that this amount of savings represented a typical amount. NARB recommended that the claim be discontinued or modified to clearly and conspicuously disclose the limitations on the amounts covered.
CHW’s claims that its service has been rated by a third-party website must include a disclosure that CHW payed a fee to the rating service, as this is a material fact that should be clearly and conspicuously disclosed to consumers in connection with any reference in advertising to the rating or ranking.
CHW stated that it respectfully disagreed with the result and NARB’s recommendations, but stated that it “is a strong supporter of NARB’s self-regulatory process and will comply with NARB’s decision.”
About the National Advertising Review Board (NARB): The National Advertising Review Board (NARB) is the appellate body for BBB National Programs’ advertising self-regulatory programs. NARB’s panel members include 87 distinguished volunteer professionals from the national advertising industry, agencies, and public members, such as academics and former members of the public sector. NARB serves as a layer of independent industry peer review that helps engender trust and compliance in NAD, CARU, and DSSRC matters.
About BBB National Programs: BBB National Programs is where businesses turn to enhance consumer trust and consumers are heard. This independent, non-profit organization enhances trust, innovation, and competition in the marketplace through the development and delivery of cost-effective, third-party self-regulation, dispute resolution, and accountability programs. BBB National Programs’ 10 leading industry self-regulation and dispute resolution programs resolve business issues of national and international importance, and fosters industry best practices in truth-in-advertising, child-directed marketing, data privacy, and dispute resolution. To learn more about industry self-regulation, visit bbbprograms.org.