Lawsuit Says Appalachian Power, American Electric Power Sell ‘Sham’ Electrical Line Service Plans to West Virginia Residents

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Appalachian Power Company (APC), American Electric Power (AEP) and HomeServe USA Repair Management Corp. face a proposed class action lawsuit out of West Virginia over their promotion of allegedly “sham” subscription service plans for exterior electrical line coverage.

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According to the 33-page fraud lawsuit, electric utility company AEP and subsidiary APC have partnered with HomeServe to send unsolicited “junk” letters to thousands of West Virginia residents. The case claims the mailers deceptively urge residents to enroll in protection plans for the maintenance and repair of exterior electrical lines, all without disclosing that these services are already covered by customers’ existing electric bill.

The letters are “rife with deception,” falsely conveying to consumers that the maintenance of electrical lines is their obligation and that the protection plans are a way to mitigate future, catastrophic electrical line repairs that will fall on their shoulders, the complaint alleges.

The defendants know APC and AEP are responsible for maintaining and repairing electrical lines, not residential electricity consumers, the suit charges. The exterior electrical line coverage plans—for which subscribers pay a monthly premium in addition to their regular electric bill—serve to reduce the utilities’ maintenance obligations while generating millions in revenue, the case alleges.

Per the filing, HomeServe also gets a cut of the profits. The suit explains that HomeServe partners with municipalities and various types of utilities nationwide to mail solicitation letters seeking customers’ enrollment in service protection plans. HomeServe sends the solicitations using private information it receives from utility partners, the case asserts.

“And while defendants APC and AEP might now inform their customers that their [personally identifiable information] might be disclosed to third parties—for years, APC and AEP told customers that they would only share [personally identifiable information] if they had explicit consent from the customer,” the filing contends. “Indeed, this arrangement between [the] defendants was made in 2015, and upon information and belief, only within the last year did APC and AEP (unilaterally) amend their privacy notice to inform consumers of the information-sharing.”

Notably, HomeServe’s letters prominently display the utility provider’s name and logo on the front, while failing to inform customers that the mailer is a solicitation and not related to any regulated electrical, water, gas or sewer services, the complaint says.

The suit contends that APC, AEP and HomeServe knew consumers would likely be tricked by the misleading nature of their solicitations and enroll in “effectively worthless” service plans.

The Appalachian Power lawsuit looks to represent any West Virginia citizens who were residential electrical customers during the applicable statute of limitations period and received an exterior electrical line coverage solicitation from APC, AEP and HomeServe, had their personal information disclosed or utilized without consent or authorization as part of the defendants’ exterior line partnership agreement or enrolled in the defendants’ exterior line coverage plan.

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