Lowe’s protection plan class action lawsuit sent to arbitration

Update: 

• In February 2021, a federal judge granted a motion to compel arbitration for a class action lawsuit claiming Lowe’s sold customers unfair extended warranties serviced through Federal Warranty Service Corp. (FWS). 
• Lowe’s and FWS each filed a motion to stay action pending arbitration. 
• The judge further ordered the action be stayed and administratively closed pending completion of arbitration. 
• The class action lawsuit claimed Lowe’s refused to honor protection plans the company sold at the point of purchase for certain items in the event of an overlap with a manufacturer warranty. 

(June 3, 2020)

A class action lawsuit has been filed after Lowe’s Home Centers allegedly sold customers an unfair extended protection plan.

Plaintiff Andrew Fritz says he purchased a barbecue at Lowe’s in January 2019 for $399. When he checked out, he was reportedly asked if he would like to purchase a protection plan warranty.

Fritz alleges he was told the protection plan included on-site repairs and was told that the plan “covered everything” and that he would be “completely protected.” He decided that he would pay for the Lowe’s extended warranty for $79.99 and the clerk placed the brochure regarding the protection plan into the plaintiff’s bag with other items.

In November 2019, Fritz says that he was having problems with his grill and requested that Lowe’s pick up his grill to fix it, which was supposedly covered under the Lowe’s warranty.

The plaintiff claims that the defendant would not honor the protection plan as the product was already under a 5-year parts warranty from the manufacturer and that they would not perform an on-site pickup of the grill.

“Defendants routinely sell Protection Plans for products for which the manufacturer’s warranty is equal to or longer in duration than the Protection Plan,” the Lowe’s extended warranty class action lawsuit states.

The plaintiff maintains that the defendants refuse to provide any services or benefits under the protection plan during any overlap with the manufacturer’s warranty.

Fritz says the description of the protection plan as “extended” serves to reinforce the consumers’ expectation that the Lowe’s warranty extends the life of the manufacturer’s warranty, not that they run concurrently.

In addition, Fritz says in the Lowe’s extended warranty class action lawsuit that the defendants often sell plans that overstate the coverage. As an example, Fritz notes that a three year protection plan for a product that has a two year manufacturer’s warranty only gives a one year coverage, at best.

Fritz claims that the defendants do not inform customers that the protection plans are not effective if the underlying product is still under the manufacturer’s warranty. If the manufacturer’s warranty is equal to or longer than the protection plan, Lowe’s warranty never takes effect. 

“Defendants’ representation of broad coverage, and omissions as to the true, limited nature of the Protection Plans, are false and deceptive,” the Lowe’s extended warranty class action lawsuit goes on to state.

Fritz says he would not have purchased the protection plan if he had known that the defendants would not provide services if the manufacturer’s warranty was still in effect. He states that he is still interested in buying a Lowe’s warranty for future purchases as long as it would be honored by Lowe’s.

The plaintiff is seeking an injunction which would require the defendant to stop selling protection plans that do not provide any value to customers during the manufacturer’s warranty period or fully disclose the limitations of the protection plans with respect to the manufacturer’s warranty prior to completing a sale for a protection plan.

The Lowe’s extended warranty class action lawsuit states that consumers relied on the marketing of the protection plans, including that they are “extended,” meaning that they extend the manufacturer’s warranty.

Had Fritz purchased a protection plan that provided coverage for longer than the manufacturer’s warranty, he claims that he would have paid less for it or would not have purchased it at all.

“A consumer would not expect a Protection Plan so sold to provide no benefits or services in addition to the manufacturer’s warranty,” the Lowe’s warranty class action lawsuit maintains.

The Lowe’s extended warranty class action lawsuit also maintains that the plaintiff and putative Class Members entered into implied contracts with the defendants to which the defendants agreed to provide services in addition to the manufacturer’s warranties.

However, the Lowe’s extended warranty lawsuit claims that the defendants do not provide any services under the protection plans if the manufacturer’s warranty is in effect.

“Defendants breached the implied contracts they made with Plaintiff and Class members by failing to provide any services under the Protection Plans if the manufacturer’s warranty was in effect,” Fritz explains.

Prospective Class Members include: “All persons in the United States, who purchased any of the Protection Plans for any product that has a manufacturer’s warranty running concurrently with the Protection Plan within the relevant statute of limitations.”

Did you purchase a Lowe’s extended warranty? Let us know in the comments section below.

The plaintiff is represented by Robert W. Killorin and Timothy J. Peter of Faruqi & Faruqi LLP and Bonner C. Walsh of Walsh PLLC.

The Lowe’s extended warranty class action lawsuit is Andrew Fritz v. Federal Warranty Service Corp., et al., Case No. 1:20-cv-02210, in the U.S. District Court for the Northern District of Atlanta.

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