Circuit City Reassures Service Contract Holders

Customers won't lose ability to get warranty repairs

January 19, 2009

Circuit City • Firedog • "No-Interest" plan • Rebates • Returns, Exchanges • Warranties • Cameras • Computers • Home Electronics --- News • Taxpayers Assume Circuit City Retirement Plan • Systemax Buys Circuit City Name, Web Site • Circuit City Reassures Service Contract Holders • Circuit City Will Liquidate, Putting 30,000 Out of Work • Time Running Out for Circuit City • Circuit City Seeks Bankruptcy • Circuit City Closing 155 Stores • Chase Trashes Tapes Containing Circuit City Customers' Data • Circuit City Settles Advertising Complaints with New Jersey

With bankrupt retailer Circuit City's announcement that it's going out of business, 34-thousand employees in the U.S. are losing their jobs. But Circuit City customers who purchased service contracts from the firm are also wondering about their future.

"Due to the bankruptcy and store closings, what will happen with a three year extended warranty I purchased in August for a new laptop computer?" Annette, of Croyden, Pa., asked ConsumerAffairs.com. "Will a third party take over the contract or is there a way to get my money back as this was a very expensive warranty — approximately $450."

The answer from Circuit City is that Annette and other service contract holders have nothing to worry about.

"Circuit City Advantage Protection Plans have been backed by third-party independent companies for more than 15 years and as a result, are not impacted by Circuit City's closing," the company said.

In other words, Circuit City just sold the "warranties," but was never the company that stood behind them. The company says all Circuit City Advantage Protection Plans are fully backed by the Assurant Solutions companies.

"Assurant Solutions operates as Federal Warranty Service Corporation, Sureway, Inc., and United Service Protection, Inc. Assurant Solutions is part of Assurant, Inc. (NYSE: AIZ), and its extended service contacts are backed by an Assurant insurance subsidiary rated A "Excellent" by A.M. Best Co.," the company said in a statement.

Even though Circuit City is closing its remaining 567 U.S. stores, it will continue to operate in Canada. The company says Canadian operations are not affected. Circuit City employees about 3,000 people in Canada.

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