PSEG WorryFree warranty offers confuse LI utility customers

When Holly Gordon of Bay Shore got the first notice from PSEG WorryFree telling her of the potential “thousands” in costs she faced if her underground water line burst, she didn’t think much of it.

“I just chucked it” in the trash, she recalled. But when a more urgent letter arrived last month, including an “Explanation of Water Line Responsibility,” she took notice. It noted that as of December, she still had not “chosen Exterior Water Service Line Coverage from HomeServe,” which costs customers $4.99 a month, and requested a reply by Feb. 17.

Gordon, 77, a fine-arts photographer, said she's confused because, as far as she knows, her town house community covers her water costs, including water line repairs. “The fact that they’re telling me I’m responsible for this doesn’t make any sense in the first place,” she said.

Ten months after a company called HomeServe licensed the PSEG WorryFree brand to begin marketing utility service contracts to electric, gas and water customers across Long Island, confusion is common among customers about the electric company’s association and the need for the contracts.

Offers for the service have gone out to utility customers across Long Island. The Suffolk County Water Authority said it gets 50 to 100 calls a day from customers about the offers, and some contractors say use of the PSEG brand has given the company an unfair advantage.

PSEG, which derives revenue from the business, has worked to distance itself from the business. Authority officials say they do not provide customer lists to HomeServe to harvest customers. 

PSEG spokesman Jim Namiotka said the company chose to work with HomeServe because of its "strong track record," but also indicated the company is aware of the customer issues. 

"We always want to speak to consumers in a clear and transparent manner, so we are working with HomeServe to improve the content of the marketing materials going forward," he said.

Seth Wallach, a spokesman for the water authority, said the agency’s call handlers make clear that it’s not endorsing, or connected with, the service.

“We just make sure the customer understands that Suffolk County Water Authority is not affiliated with this letter or with PSEG or HomeServe,” Wallach said.

And while the water authority makes clear that customers are indeed responsible for potential water line repairs on their property, Wallach noted that the frequency of breaks in those lines varies greatly.

“Older galvanized pipes tend to be more susceptible to leaks, while we don’t hear about newer copper lines breaking much,” Wallach said. The SCWA gets two to 10 calls a week about broken lines in its service territory, he said.

HomeServe is a London-based company with U.S. headquarters in Norwalk, Connecticut, that offers home repair services and warranties for equipment and utility customers across the country. Its warranties are from North American Warranty of Chicago. 

PSEG Long Island, which provides service to 1.1 million LIPA customers on Long Island and the Rockaways, says it is not affiliated with the offers, which are managed by HomeServe using the PSEG WorryFree brand. PSEG’s parent has a separate service division in New Jersey known as PSEG WorryFree that’s licensed to HomeServe, with service and marketing by HomeServe. HomeServe partners with utilities across the country to make similar offers. 

Matthew Cordaro, a trustee for LIPA, which has a long-term contract with PSEG Long Island, said the language in the letters seeking to distance PSEG from the offers "I don't think is enough to eliminate the unfair advantage they get by using the PSEG logo." 

Customers "don't read the fine print," Cordaro said, speaking for himself and not the LIPA board. "I think it's unfair for them to rely on the appearance of the PSEG logo to entice people to open up the letters. Even the description of what they're saying relies on scare tactics to get seniors and poor people upset about a possible expense." 

James Denn, a spokesman for the Public Service Commission, said the agency hasn't received complaints from the Suffolk County Water Authority or its customers about the warranty service. The PSC doesn't regulate public water authorities. 

Mike Giardina, manager of PSEG WorryFree on Long Island, directed questions to HomeServe.

“As you may be aware, PSEG WorryFree licenses its name to HomeServe for use in connection with HomeServe’s protection plans,” he wrote in an email. 

Myles Meehan, a HomeServe spokesman, didn’t address Gordon’s concerns specifically but indicated customers were unaware of what parts of their water lines weren’t covered.

“Many Suffolk County residents receiving this optional water service line repair plan offer are being educated on this fact for the first time,” Meehan said. “As a result, it may be contributing to calls into SCWA for clarification.”

Meehan said just over half the homes on Long Island are more than 50 years old, “so many of the service pipes” are “likely to be on borrowed time,” since they tend to fail at between 30 and 60 years old.

“The PSEG WorryFree service plan from HomeServe might be a good investment for residents to consider,” Meehan said.

Gordon said she was particularly confused about the warranty service’s affiliation with PSEG. She noted that PSEG Long Island has frequently warned seniors groups about phone scams regarding electric bills.

“It says PSEG WorryFree all over this letter,” Gordon said. “It was on the envelope, in the fine print, it’s got HomeServe, it’s got quotes around HomeServe PSEG WorryFree. I looked at the back and there’s PSEG, PSEG, PSEG all over it, so what is a customer to think?”

“When I got this my immediate thought was, what kind of garbage is this?” she said. “When I think of all these elderly people who are on limited income, to chop $4.99 a month out of their meager income, it’s terrible.”

PSEG Long Island spokesman Jeremy Walsh said the company works "year-round to educate the communities we serve about the scams affecting our service area. If our customers have questions about something they receive, we encourage them to contact us.”

Walsh continued, “PSEG WorryFree is not the same company as PSEG Long Island. PSEG WorryFree licenses its brand to HomeServe for use in connection with protection plans offered by HomeServe.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.