Q: I signed up for Xcel Energy’s HomeSmart program for appliances, and the monthly fee was later increased. I was automatically charged and put on for another year. Is this a scam?— Dean Dubach, Denver
A: I don’t think it’s a scam, but I can see how you might have felt that way if you had overlooked the notices that were mailed to you.
The HomeSmart program is actually a wholly owned subsidiary unit of Xcel but is self-supporting and not regulated by the Colorado Public Utilities Commission.
Its objective is as an appliance repair plan where customers pay a monthly fee — it was $14.99 for a while before it increased to $16.99 in January 2008 — and any repairs to covered appliances are serviced under the agreement. Four appliances of your choice are covered, and extras can be added at $4 a month.
Although the price increase was announced, it was not implemented until a client’s pending contract expired. At that time you could cancel. However, if the mailer passed you by — and it’s amazing how frequently this happens in many things, including credit-card interest-rate increases — you were re-enrolled automatically.
More important, the contract is very clear in its absence of any provision to cancel once the renewal occurs. Nevertheless, the folks at HomeSmart say they review each request individually and it behooves them to keep folks happy.
There is one obvious catch: Don’t expect to be able to cancel if you’ve already had service done on your appliance. Too many times someone will buy into the agreement and immediately require repair work to a furnace or refrigerator, then attempt to cancel shortly afterward.
No go, says HomeSmart. That’s when they figure the cost of the repair compared with the remaining amount of the contract and charge you the lower of the two in order to cancel the contract.
Makes sense. But as with all things, read the fine print and know what you’re getting. Also, at least take a peek at the mail, even if it appears to be junk. You might miss something.
