Arizona AG sues home warranty company over misleading statements

May 20, 2021, 4:35 AM | Updated: 8:49 am
Arizona Attorney General Mark Brnovich (Flickr/Gage Skidmore)...
Arizona Attorney General Mark Brnovich (Flickr/Gage Skidmore)
(Flickr/Gage Skidmore)

PHOENIX — Arizona Attorney General Mark Brnovich’s office filed a consumer fraud lawsuit last week against a home warranty company for allegedly misleading consumers.

The lawsuit alleges Amazon Home Warranty – which is not related to – falsely advertised how long they had been in business, attempted to hide the true identity of the company’s primary owner and posted fake five-star reviews.

The company stated it had been in business for nearly a decade, when in reality it had just started operating in 2018, according to the lawsuit.

Fake identities were also allegedly created to hide the company’s primary owner, Harry J. Bailey, who previously held 50% ownership in a company selling home warranty services that earned an “F” rating with the Better Business Bureau and had its authority to do business revoked in New Jersey, according to the lawsuit.

It was alleged the company in its first application to the BBB falsely said Marc Abady, the company’s chief financial officer and a resident of New Jersey, was the president and owner when Bailey was actually Amazon Home Warranty’s owner and CEO. That application was denied.

A subsequent BBB application listed Patrick C. Bateman as the company’s president, a fake name, with Bailey pretending to be “Bateman” on a call with the BBB, according to the lawsuit. That application was accredited, with a LinkedIn account for the fake name being created that falsely stated Bateman had been the president since September 2009.

Gary Ojeda was then listed as company president, at least as of 2020, and was updated on the BBB website – a name that was also alleged by the lawsuit to be fake.

During this time, Bailey was the company’s president, according to the lawsuit.

The company is also alleged to have promoted the business through bogus five-star reviews, according to the lawsuit, with the fake reviews often being copies of reviews posted about competitors.

The lawsuit alleges at least 25 five-star reviews were posted on a single day in October of last year that was previously posted by customers on another warranty company’s website and repurposed to be posted to the BBB’s website by people pretending to be customers of Amazon Home Warranty.

The company denied knowledge of the fake reviews, but the lawsuit states the denial is implausible given the ubiquity of the fake reviews and the benefit provided to the company.

The lawsuit also states the company failed to take corrective measures to rectify the deceptive conduct even after the state notified them about it.

Brnovich’s office seeks consumer restitution, civil penalties and injunctive relief for the company’s alleged actions, according to a press release.

“Home warranty companies, like all businesses, must be truthful in their advertising,” Brnovich said in the release. “Unplanned home repairs are already stressful enough. Consumers should not be subjected to bogus reviews and other misrepresentations by home warranty companies.”

This marks the third action Brnovich has filed against a home warranty company in the last two years.

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Arizona AG sues home warranty company over misleading statements