At the heart of the current U. S. mortgage crisis are a variety of players that include circa 2006 home buyers with houses they couldn’t really afford, mortgage brokers who sold mortgages to people they knew couldn’t afford them, banks who turned those mortgages into securities that were bound to (in some cases designed to) fail, all held together with bureaucratic glue made almost entirely of testosterone and bullshit, and decorated with robo-signers and lost documents by the millions. Old news, right? But who would have thought we’d see many of the same behaviors emerge around one crappy refrigerator from Home Depot?

My friend Ralph owns that crappy fridge, an LG model based on a Whirlpool design that was built for only one year it was so bad. Ralph, who didn’t know any of this at the time, bought the Fridge at Home Depot and bought the extended warranty there, too. Since then he’s had seven service calls to replace all the circuit boards, the compressor (twice), the ice maker (three times), and to replace various plastic parts that had literally fallen off. One failure spoiled all the food in the fridge which (GE?) paid to replace. One ice maker failure was so bad it flooded Ralph’s house. The ice maker especially is so bad on these fridges that there are no longer any replacement parts available to be ordered. None.

Now if you have bought any larger ticket item at Home Depot you know they have a three strikes and you are out policy very similar to certain state lemon laws. For all I know it may even be a state or federal regulation that prompts Home Depot to replace the entire unit if any part breaks three times.

Ralph, with his third ice maker lying dead in the bottom drawer freezer of his old LG, is due a new refrigerator-freezer.

But so far he can’t get one.

Here’s the problem. Like most big box retailers, Home Depot doesn’t really offer its own extended warranties. They resell warranties from a third party, which in the case of Ralph’s fridge came from General Electric.

It’s pretty ironic, don’t you think, getting a GE warranty on an LG appliance?

So it is GE, not Home Depot or LG, that should pop for Ralph’s new fridge. Except GE sold the warranty along with a lot of others to another company called Assurant Solutions, which now handles extended warranty repairs for Home Depot.

This is analogous to your mortgage being bundled with a bunch of other mortgages and sold to a different bank.  Assurant Solutions is like that mortgage servicer  you love to hate.

Ralph dutifully made his claim, then, to Assurant Solutions. “Give me my new refrigerator!”


Assurant Solutions assured Ralph that he indeed would qualify for a new fridge if his ice maker had, in fact, failed three times, but they had no reason to believe that was the case, BECAUSE THEY RECEIVED NO SERVICE RECORDS AT ALL WHEN THEY BOUGHT HIS WARRANTY FROM GE.

Ralph has receipts, he has photos of bad parts, he even has the complete second-to-last ice maker as a memento from the repairman who by now has his own coffee mug at Ralph’s house. Ralph has plenty of documentation to prove that his fridge is a dud and he is therefore owed a new one. But since Assurant Solutions has no repair records, they say they can’t help him, so he has to go back to Home Depot.

And that’s exactly what Ralph did. Calling Home Depot he learned that store managers have super powers they can invoke in cases like this. So Ralph took his receipts and his pictures and his busted ice maker to the very Home Depot where he bought the fridge and confronted the store manager, who was very sympathetic. The manager took his own pictures, asked questions, filled out a form, and submitted it to Home Depot HQ as proof that Ralph’s beef was legit.

And Home Depot, accepting all this on the word of its store manager, sent all the paperwork along to Assurant Solutions, which promptly denied the claim BECAUSE THEY RECEIVED NO SERVICE RECORDS AT ALL WHEN THEY BOUGHT HIS WARRANTY FROM GE.

Are we seeing a trend here? Ralph is being victimized. After all, he paid for that extended warranty. It’s easy to see Assurant Solutions as the bad guy, but why didn’t GE hand over those service records? Why didn’t Assurant Solutions demand them a part of its due diligence? Because Ralph’s LG fridge is the food storage equivalent of a sub-prime mortgage might be the answer to this question. Neither GE nor Assurant Solutions probably wanted to even think about Ralph in the midst of their deal-lust.

Ralph can go to court, of course, and probably will.  But short of Home Depot doing the right thing or GE fixing its error and Assurant Solutions then fulfilling its obligation, I’m expecting to enter shortly, stage left, the robo signers! They might claim Ralph’s LG refrigerator doesn’t even exist.

Update — It took about an hour but Ralph now has a $2400 credit from Home Depot for a new refrigerator of his choice.