Liquidated damages

What do you do when you’re denied warranty service because the vendor claims your system was damaged by a mythical spill of some liquid? I often hear from people who know they didn’t spill the milky substance they are being told has invalidated their warranty, but can’t prove it. One reader in such a situation however recently found a way to get his warranty honored, and in the process made a point from the discussions we’ve had about the questionable value of extended warranties.

Two-and-a-half years ago the reader bought a Toshiba Satellite M45-S355 laptop and a three-year Technology Assurance Plan (TAP) extended warranty at his local CompUSA store. “Last July the system started to have a problem where it wouldn’t stay powered up, so I took into the CompUSA to get it fixed under the extended warranty,” the reader writes. “Four weeks later it came back, but it still had the same problem. After being on for an hour or so, it would die and it would only power on again after I took the battery out and reinserted it. This time it time it took six weeks before it was declared fixed and returned to me.”

On October 22nd the reader received his laptop and discovered immediately that the system still died after a few hours, so the very next day it went back to CompUSA for a third time. He didn’t hear anything about it again until shortly before Christmas (he found out later that his laptap had sat at the CompUSA store for weeks before being sent to the Nexicore depot, where all three repairs were done.) And it wasn’t good news. “CompUSA called to tell me that they had found evidence of ‘customer liquid spill damage’ on the motherboard,” the reader wrote. “As liquid damage is not covered under TAP’s terms and conditions, the extended warranty repair was being declined.”

The reader was quite certain that if liquid had been spilled on his laptop, it wasn’t the customer who spilled it. “I’m very vigorous about not allowing liquids around my computers, but I can’t prove that I never spilled anything on the laptop. I didn’t, but I’m sure that there are lots of people who lie about that when they really did spill coffee or soda on it. So how do I prove it, and who do I prove it to? CompUSA is going out of business, so they don’t care. Toshiba or Assurant Solutions, the company that’s responsible for the TAP program now, are going to believe Nexicore, not me.”

To make things seemingly more daunting, when the laptop was finally returned in January, still with the same power problem, Nexicore attached photos purporting to show the damaged motherboard. The vague outlines of what could possibly be a puddle of something can be seen. “I showed it to an expert and he says it look mores like flux than a liquid, which would be consistent with the work Nexicore did on the motherboard the second time they had it. But even opening the laptop again might not prove it one way or the other.”

Fortunately, the reader is a fighter and was not about to give up on getting his extended warranty honored. Just before his local CompUSA closed its doors for good, he demanded copies of all their records concerning the attempts to repair his laptop. He also contacted Nexicore and got them to confirm from their records that the motherboard had been worked on both the first and second time it was in, without anyone noticing the supposed liquid damage. “So for me to have caused this alleged liquid damage, I would have had to spill something on it in the 22 hours I had the laptop between Oct. 22 when I picked it up and Oct. 23 when I returned it. So if Nexicore is correct about this being spillage, isn’t it a lot more likely it happened at Nexicore or at CompUSA?”

Having assembled his evidence, the reader sent an e-mail with all of it to the president of Assurant Solutions, copying officials at Toshiba and Nexicore as well as me. He demanded they honor his TAP agreement either by finding an authorized Toshiba repair facility other than Nexicore or offering him a cash settlement.

“I got a call the next day after I addressed my letter to Assurant Solutions president, so I guess going to the top works. They offered me replacement value of something like $619, and I suppose that would have been fine if I hadn’t been without a laptop for 20 weeks in their ‘care’ and since July 2007 in total. So I pushed back and they went up to another model that would be $799.99. I debated if I should push for the full price I paid in 2005, $1,500, but I’ve been without the laptop long enough.”

I think Assurant Solutions was wise to make that deal, because the reader was very ready to make a lot more noise about this through me and others in the press. “I knew that if I wanted to I could push this even harder and make a huge case out of this. I would make it an ‘industry issue’ and point out the whole extended warranty problem, the money gusher that they are for the retail industry but with a poor pay off for the users, like you’ve been pointing out with flat screen TVs. If the cash cow of extended warranties can be shown to be loosing steam because of terrible service and an inability to fix the products, the financial people will take notice. The retailers and insurance companies do NOT want the message that only idiots and suckers will buy extended warranties on big screen TVs and laptops. That will hurt them all on the bottom line.”

Losing out on all that extended warranty money would be spilled milk that the vendors certainly would cry over. So if a vendor is not owning up to their warranty obligations to you, take a leaf out of the reader’s book and push them hard. And don’t forget to copy me at Foster@gripe2ed.com.

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