According to members of the Somerville Board of Aldermen, residents in Somerville, often elderly residents, have been receiving an official-looking document in the mail that's actually an ad for a type of insurance—insurance that covers water lines into people's homes.

The company behind the ad has been the subject of complaints in the United States and United Kingdom for misleading mailings and sales practices, according to press reports.

It looks official, but it ain't

The problem, say members of the Board, is that the ad is not an official document, but its design seems intended to fool residents into thinking it is.

"This is misleading; this is deceptive," said Alderman At-Large John Connolly, speaking at the aldermen meeting Thursday night.

"This is an outrage," said Ward 6 Alderman Rebekah Gewirtz. "This looks like it came from the city of Somerville."

Gewirtz said it was "a deliberate attempt" to mimic an official document.

"It certainly is misleading," said Ward 5 Alderman Sean O'Donovan, who, along with Gewirtz, proposed an order that the Board's senior services committee caution residents, particularly the elderly, about the ad.

Comapny reached $75,000 settlement with Massachusetts Attorney General

The company behind the ads, HomeServe USA, has been down this road before. In November, it reached a $75,000 settlement for misleading solicitations with the Massacusetts Attorney General's office, according to the Boston Globe.

According to the Financial Times, the company has also been watched by the UK Financial Services Authority, and it reached compliance agreements with the attorneys-general of Ohio and Kentucky.

What Somerville Residents received

The mailing, which looks a bit like a bill or an official notice, reads, in all capital letters, "Important information regarding your water service line."

Under that, in a copy of the ad provided by O'Donovan, it reads, "Please respond by February 29, 2012." The ad also include the name of the resident receiving it.

"Our records indicate your property is not covered by Water Service Line Coverage from HomeServe," it continues. "As a homeowner, you are responsible for the maintenance and repair of the water service line from your service connection to the foundation of your home."

It then accepts credit-card, check and money-order payments for insurance covering water lines: $4.99 per month, $14.97 per quarter or $59.88 per year.

A closer read of the document reveals language that explains the truth: "This optional coverage provides timely repairs to resolve your emergency," it says, italics included, somewhat buried under other text.

It then has a perforated line, like those found on billing invoices, with the words "Complete and Return by February 29, 2012."

Above that line, in smaller font, it reads, "HomeServe USA Repair Management Corp. ("HomeServe") is an independent company separate from your local utility or community and offers this optional service as an authorized representative for AMT Warranty Corp., who is your contract issuer." (Again, italics included in the original mailing.)