Maytag/Whirlpool Service Contract Class Action Lawsuit

A disgruntled customer has filed an amended class action lawsuit against Maytag Corporation (now a part of Whirlpool Corporation) and its service contract administrator Service Net Warranty, claiming the companies engaged in deceptive and unfair trade practices by refusing to honor their service contracts.

“Thousands of consumers — or perhaps hundreds of thousands — were ripped off by Whirlpool and Service Net when those companies did not repair or replace faulty appliances per the terms of the service contracts,” said the Plaintiff’s attorney.

According to the amended class action lawsuit, Plaintiff Mark Sherman purchased a Maytag clothes dryer along with a three-year service contract that promised to repair or replace the appliance if it failed. The contract 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 Maytag/Whirlpool service contract class action lawsuit alleges that Maytag and Service Net told Sherman that he was only entitled to a refund of the present value of the dryer, minus the cost of the repairman’s visit.

According to Sherman’s attorney, “That is absurd, since the point of buying a service contract is to avoid the cost of repair.”

Sherman alleges in the Maytag/Whirlpool class action lawsuit that the companies failed to fulfill the terms of the service contract by improperly administering buy-outs. As such, the class action lawsuit alleges that the dryer’s 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.

“Consumers purchase service contracts to ensure that they will be protected should an appliance need repair or replacement. Corporations and service contract providers need to be held accountable to the terms of the service contracts,” said Sherman’s attorney.

The case is Sherman v. Maytag Corporation, Whirlpool Corporation, and Service Net Warranty, LLC, Case No. 3:11-cv-01010-JBA, U.S. District Court, District of Connecticut.