Retail Observer

RETAILOBSERVER.COM OCTOBER 2014 64 O ver the past few years, one of the most noticeable growth areas (and maybe the most frustrating) in the appliance service areas has been the proliferation of home warranty companies or third party administrators. Traditionally, these companies were attached to a dealer or sales organization that provided extended warranties options to their customers, but they have expanded into stand-alone providers that solicit whole home warranty coverages, or may affiliate themselves with realty companies to provide an extra "bonus" to a prospective homeowner. Many of these companies have long standing business operations and are held in fairly high regard. However, there have also been many that have popped up in what can only be termed the pursuit of "easy money", and have had no staying power- they are either out of business or have cut back their operations to the point where it is impossible to reach anyone that can assist in completion of a work claim. This leads to obvious problems for the service provider that was asked to work on the product in the first place. In most cases, these companies do not have a service network per se; they scan phone listings to see if a service provider is in the area, or they may ask their customer if they have a preferred service provider that they want to work with. The TPA then calls and negotiates a service call with the local provider, and provides either a work order or a reference number that the service provider provides in order to get paid. The servicer diagnoses the problem, they may get the part from the TPA, the unit is repaired and then the service company files for payment. This is where the process can go off the rails. Reliable companies usually process the claim promptly and the service provider gets their money. Less stellar TPA's can lead service providers into a maze of unreturned phone calls, unanswered messages, and general frustration. In far too many cases, servicers end up writing off the claim or even billing the customer directly, leading to long term issues with a customer that thought they were covered by a warranty. We get a lot of inquiries from our members as to how they can avoid problems like this, and whether or not a TPA or warranty company is legitimate and reliable. And there is one very basic step that needs to be taken. Fortunately, in this day and age, it is a fairly easy step. RESEARCH THE TPA OR WARRANTY PROVIDER ON THAT THING CALLED THE INTERNET When you get a call from a company that you are not familiar with or have never done work for prior to this point, get online and check them out. You will generally find a lot of information on them, including complaints from your peers in the industry if they have not produced as expected. There will also generally be a Better Business Bureau (BBB) rating that you can check out. If they are not an A rated company, take care in dealing with them. You owe it to yourself to do this research. We hear a lot from members and others that have been burned, yet did not take this easy step. It can save you a lot of effort and heartache later. If you are not comfortable with what they are telling you—don't take the call. Better safe than sorry. Another option that I have heard from some of our members is that they will run the call, and run it under the guidelines of the company, but they will charge the customer with the expectation that the company will then reimburse the owner. This seems to be effective in supporting good customers that have requested your services, and it puts the TPA in place as the responsible party. You as the service provider have an obligation to your company to adequately research service opportunities that come your way, and today, we all have the tools to do a much more effective job of that. Knowing your business and understanding your capabilities and cost of doing business will help you make solid business decisions that will keep you out of the frustrations of chasing down your money as well as protecting your customers and your business. You have enough to do as it is! DO YOUR HOMEWORK WHEN DEALING WITH TPA'S AND WARRANTY COMPANIES S E R V I C E D E P A R T M E N T RO Randy Carney Executive Director- PSA

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