On November 19, the Minnesota Attorney General (AG)
announced his recent
settlement with a real estate broker (the defendant) over allegations related to the defendant’s advertising of home warranty service contracts with a third-party provider. The AG alleged the defendant did not disclose payments it received from a third-party home warranty provider and that its activities caused confusion among consumers about the value of the warranties, leading to potential violations of Minnesota’s consumer protection statutes. The AG also found that a third party’s home warranty service contracts confused consumers into believing that the third party’s home warranty was a valuable product and contained benefits that the warranty did not actually have. The defendant disputed these allegations, asserting that it provided written disclosures to customers, which were signed, indicating that the defendant advertised the warranties in exchange for a fixed service fee.
The defendant must pay $3.5 million to the AG. The settlement also included several injunctive relief measures. The defendant agreed to discontinue its existing contractual relationships with warranty service providers and refrain from entering new contracts for promoting third-party products or services. Minnesota consumers who purchased the home warranties on or after July 1, 2018, may be eligible for refunds if they meet certain criteria, such as having claims denied or not filing claims within the first year of purchase.
