Question: What happens to the service plan on my appliances if Sears sells its Hawaii stores, as it is trying to do, or if it can’t (find) a buyer and the stores are closed? I just bought all new appliances last year and paid extra for the extended warranties.
Answer: “We are honoring our warranties,” Larry Costello, a spokesman for Illinois-based Sears Holdings Corp., told Kokua Line via email, referring us to an FAQ (808ne.ws/searsfaq) for more information.
Issued on Oct. 15, when the company filed for Chapter 11 bankruptcy protection, the FAQ says Sears will honor warranties, protection agreements and guarantees on products that customers have already purchased or might purchase in the future.
Sears has said that it has “no current plans to close” its remaining Hawaii stores, which are scheduled to go on the auction block Jan. 14. Bids will be considered from buyers who intend to keep the stores open as well as from those who intend to liquidate, according to news reports (808ne.ws/sears).
Eric Arnum, editor of Warranty Week, an industry newsletter, said state laws generally protect consumers in these situations, requiring that companies that sell extended warranties for appliances and other products demonstrate assets or insurance to cover these service contracts. For example, insurance companies stepped in to honor extended warranties sold by Circuit City and CompUSA when those companies went bankrupt, he told CNBC.
Kokua Line asked Arnum whether the same would be true if the stores stayed open under new ownership. He replied, “The fate of those warranties would be part of the sales agreement for the stores. Sears is liable for them now and in the future. But they could sell that liability to the new owner, along with the storefronts. Or they could sell it to another third party company, perhaps an insurance company like Assurant or AIG. Or they could keep it, and sell just the stores. Up to them. What they can’t do is walk away from them. Extended warranties, or service contracts, are regulated at the state level, like insurance. So it would be up to the insurance division of the Hawaii Department of Commerce and Consumer Affairs to decide how the liabilities are ultimately dealt with. I’d suggest you ask them for a definitive answer.”
We did, but a spokesman said the division couldn’t answer by deadline. We’ll follow up again this week, as numerous readers have asked similar questions.
Stephen H. Levins, director of the DCCA’s Office of Consumer Protection (a different division), said the insurance division regulates service contracts pursuant to Chapter 481X of the Hawaii Revised Statutes, which you can read at 808ne.ws/hrs481x.
Auwe
Auwe to the dude who was yelling at me at Kahana boat ramp. He didn’t want us to park a moment for me to use the restroom, because he has to pay a ramp fee. He didn’t even have a trailer on his truck; seems he was reserving the whole parking lot for his friends and him to party. Ho! What if I’d been a tourist and he screamed like that? Shoots! Dude! — J.S.
Mahalo
On Black Friday my car stalled next to the Kahala Times Supermarket during morning rush hour traffic. Rance Okudara noticed that I was in trouble and pulled off the road to help. He and another gentleman (whose name, unfortunately, I never got) pushed my car out of traffic and into the store lot. He even bothered to check under the hood and explain the problem to me, and left once he knew the tow truck was on its way. Thank you to these two good Samaritans. — Grateful motorist
Write to Kokua Line at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; fax 529-4750; or email kokualine@staradvertiser.com.
