Residents steamed over logo deception by water pipe insurer

A water pipe insurer trying to gain residential clients by bypassing the junk-mail pile came up with an idea to use official-looking city logos and first-class business envelopes to trick homeowners into taking the mail seriously.

And nobody is happy about it, reported Cincinnati’s Channel 9 WCPO news station, telling the tale of Randy Wright, who thought his home city of Alexandria, Kentucky, “had an important tax message for him.”

"They have the city logo on the envelope, and they have the city logo on the letterhead itself, and they are signed by the city," he recalled to a reporter.

Inside, a letter offered $8-a-month "underground water line protection,” sometimes called water pipe insurance in the event of a water pipe burst. The insurance covers $8,000 in repair costs, according to the news report.

"It looks very professional," Mr. Wright told a reporter. "It looks like it is from the city government, and I think as a result, people tend to think they are offering it, and recommend it, and then sign up as a result of that."

Mr. Wright discovered the letter was from a third-party company, Service Line Warranties of America, which now has a deal with 400 cities, paying each a commission of 5% to 9% of sales in exchange for use of the city logo, according to the report.