THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Insurer’s mailing draws criticism

Solicitation resembles bill from National Grid

By Megan Woolhouse
Globe Staff / February 18, 2011

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It looks like a utility bill, with a “Pay This Amount’’ box and the warning “Payable Upon Receipt.’’ There is a demand for the “Total Due ’’ and even a National Grid Energy Services logo.

Yet this is not a bill.

It is a mailed solicitation from HomeServe USA, which sells insurance coverage for repairs to furnace and plumbing systems. Myles Meehan, senior vice president of HomeServe USA, said the offer was not an attempt to dupe customers into paying a bill, but rather an effort to win back former customers, bearing no resemblance to a bill.

“I think it’s laid out in a very straightforward manner,’’ Meehan said. “I get bills and I’m sure you do too. They look very different.’’

Actually, they do not, said Susan Grant, director of consumer protection at the Consumer Federation of America, a consumer watchdog group in Washington. Grant, who reviewed a copy of the mailing, said it appeared to intentionally confuse customers into thinking that it was a demand from National Grid for payment. It includes a “reply by date,’’ option to pay by credit card, and a total: $191.20.

“If I received this, I would be surprised and angry to see that it’s actually not something that I owe,’’ she said. “The way this is done, it just raises my hackles.’’

The mailing by HomeServe USA, a subsidiary of a British firm, is part of a direct marketing effort to 3 million people in the Northeast, done in consultation with National Grid, the regional natural gas and electricity provider.

Harry Pierre, a spokesman for Massachusetts Attorney General Martha Coakley, said the office has received several complaints from consumers “that HomeServe’s solicitations closely resemble National Grid utility bills.’’

The only clear reference to HomeServe on the mailing is a footnote that says, “HomeServe is not affiliated with National Grid or its affiliates; participation in the program is optional.’’ The footnote is located on the bottom of the back of the page, in fine print.

Pierre said the attorney general’s office is reviewing the complaints.

The attorney general has the authority to take legal action against any business that engages in “unfair and deceptive marketing practices.’’

Pierre urged consumers to carefully review any solicitations or bills they receive from National Grid Energy Services or HomeServe.

Meehan would not disclose how many people received the bill look-alike, but said HomeServe USA began working with National Grid last August when the company bought National Grid’s struggling emergency heating insurance business for a reported $15.4 million.

As part of an agreement, National Grid sold HomeServe USA the right to use its name and logo through 2011, and HomeServe agreed to pay National Grid a percentage of every sale.

Neither company would disclose their profits from the program or how many people had signed up for the “premiere heat plan’’ costing $239 a year. (The mailing offered the service at a 20 percent discount, for $191.20.)

Meehan said that anyone confused by the offer would still have 30 days to review materials about the program, and cancel if desired.

National Grid spokesman David Graves said all HomeServe promotional materials were reviewed by National Grid. He said none of the mailings appeared to look like a bill.

The Globe e-mailed Graves its copy.

He reviewed it and said it did not look like a bill and was obviously an offer because it asked recipients to “reactivate your coverage.’’

“I don’t think there’s anything misleading in here at all,’’ Graves said.

Megan Woolhouse can be reached at mwoolhouse@globe.com

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