That is the stupidest thing I have ever heard. What a ridiculous excuse. How on earth could the paper towels, from INSIDE the tank, on the OTHER SIDE OF THE GLASS, possibly cause the pad to melt? Think about this for a second. What probably caused your pad to melt was faulty wiring or a thermostat that was not working correctly. They just didn't want to have to replace it.
EDIT: Also, there are plenty of people on this forum that use under tank heat AND paper towels, that have never had a problem. I just can't believe that was the reason he gave you. RIDICULOUS! I would call them back and inform them that there is no possible way that the presence of paper towels on the OTHER SIDE OF THE GLASS caused the pad to melt. With that reasoning, aspen chips should cause it to melt just the same. In fact, ANY substance covering it should cause it to melt then. Please ask them for their "scientific" reasoning for that response. I'm dying to know.
Sorry, I just hate it when companies come up with stupid excuses. It's infuriating.