Dallas logo on insurance letter confuses many

A lot of Dallas residents have received an offer for sewer insurance. It comes in an envelope with the city logo and even appears to be sent from the city. But FOX 4 consumer reporter Steve Noviello says buyers should beware.

At first glance, the offer looks like it could be part of a city-run program. The Dallas logo is on the letter head and the letter is even signed by the city.

But the letter is from a company called Utility Service Partners Label doing business as Service Line Warranties of America, or SLWA.

It offers sewer line insurance, which is in no way affiliated with the city of Dallas as far as any insurance claims or work resulting from a claim.

Instead, a memo from City Hall says SLWA paid the city $450,000 for a one-year, non-exclusive license agreement, which allows them to use the city's name and logo on letter head, billing and marketing.

The issue isn't necessarily with the Pennsylvania-based insurance company. They have an A rating with the Better Business Bureau.

But some argue the logo confuses customers who think they are being asked by the city Dallas to enroll in a protection program.

In fact, the chance for confusion is so high it was discussed during an April 7 council meeting.

On a presentation slide, the Dallas CFO lists cash under the pros. Meanwhile, the cons include negative perception for selling the city's name, negative media attention and "participating homeowners may think the city is involved with the service."

The City of Dallas met behind closed doors on Wednesday to discuss the next step.

The insurance costs a homeowner $6.50 a month against sewer line failure on their property.

Voted down once, city leaders say they're embarrassed that the deal was later approved as part of a budget amendment.

"I just missed that thing," said Dallas City Councilman Philip Kingston. "It's the wrong thing to do. It's deceptive…it has the city's logo on it and it's not us."

Dallas resident Yvonne Ramirez says at worst, it appears to be a demand letter backed by the strength and power of the city to scare and motivate customers, and at best, it's a soft endorsement.

"For Dallas to sell its logo…kind of like entrapment," said Ramirez.

City leaders say they are unaware of whether the city has yet to receive any money under the current contract.

An upcoming public discussion will include whether to try to break it or let it ride and prevent subsequent contracts.

MORE: www.facebook.com/SaveMeSteve/posts/1003003639733993

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