Whirlpool Hit with Class Action Lawsuit Over Appliance Buyout Provision in Extended Service Plans

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A proposed class action lawsuit alleges Whirlpool and AIG WarrantyGuard have misrepresented extended service plans offered for Whirlpool appliances in that the plans neither provide a level of coverage comparable to the manufacturer’s actual warranty nor cover 100 percent of the parts and labor necessary to repair a consumer’s appliance at no cost.

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In particular, the 63-page Whirlpool lawsuit claims the companies’ marketing gives consumers the impression that the plans are being offered by Whirlpool—not AIG—and essentially operate as an extension to the appliance’s original manufacturer warranty. Instead, the suit says, the extended service plans at issue offer only “limited” coverage and contain a provision that allows the companies, at their sole discretion, to refuse to repair a covered appliance and instead buy it back from the consumer with a one-time cash payment. This cash payment “does not make the consumer whole” as it is capped at 75 percent of the purchase price of the bought-out appliance, the case says.

Ultimately, the buyout provision in the Whirlpool extended repair plans, covering Whirlpool, KitchenAid, Amana, Maytag, Kenmore and JennAir appliances, serves to help the company generate “unfair profits” at the expense of unsuspecting consumers who “would have no reason to suspect that the coverage they bargained and paid for will be limited in such a manner,” the breach-of-contract lawsuit alleges.

The plaintiff, a Washington consumer, purchased a Geek Squad Protection Plan for her KitchenAid dishwasher at the time she bought the appliance from Best Buy, the filing says. The woman was subsequently contacted by co-defendant AIG WarrantyGuard, an AIG subsidiary and the obligor for Whirlpool’s extended service plans in most states, which offered to sell her a service plan at a price lower than what she paid for the Geek Squad plan, the suit shares.

“Being a retiree on a budget, she cancelled her [Geek Squad] Plan and purchased a KitchenAid Plan to save money,” the case relays.

Unfortunately, the amount of money the plaintiff saved by switching to a KitchenAid service plan was “more than offset” by what she had to pay to buy a new appliance when Whirlpool and AIG WarrantyGuard bought out her dishwasher, the lawsuit reads.

Several months before the defendants bought the plaintiff out of her dishwasher, the woman filed a warranty claim for a different issue, the case shares. The plaintiff alleges that the defendants, in disregard of their service plan representations, required her to find her own repair technician to resolve the issue, pay out of pocket to cover the repair, and then seek reimbursement from Whirlpool and AIG WarrantyGuard because, according to the companies, they had no repair technicians in her area. Per the case, the plaintiff was unable to find a repair technician who was willing to perform the repairs in accordance with the defendants’ conditions.

“Plaintiff ended up receiving no benefits for her claim and had to make do with a malfunctioning dishwasher until a subsequent failure caused Defendants to buyout the appliance,” the complaint states, alleging the plaintiff’s troubles with Whirlpool and AIG WarrantyGuard are not isolated incidents given that thousands of consumers each year purchase service plans “under the mistaken belief” that they are buying extensions to Whirlpool’s manufacturer’s warranties.

Overall, the defendants’ “fraudulent and misleading conduct” renders the Whirlpool extended repair plans at issue “essentially worthless,” or, alternatively, slashes their value to only a fraction of that paid by consumers for the plans, the suit claims.

The lawsuit looks to cover all persons who, within the last four years, bought a Whirlpool extended repair plan for an appliance that was domiciled in the state of Washington at the time they bought the plan.

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