SEATTLE - A Kirkland-based water heater contractor will pay up to $10,000 in restitution, $5,000 in attorney fees and will stop engaging in unfair business practices under a settlement announced today by Attorney General Christine Gregoire.
In a consent decree filed in King County Superior Court, Action Water Heaters doesn't admit guilt, but agrees to conditions it must meet in order to avoid paying $35,000 in civil penalties.
In a lawsuit filed nearly a year ago, attorneys with Gregoire's Consumer Protection Division accused the firm of a bait-and-switch tactic known as "low balling," in which a typically competitive work estimate balloons to a much greater amount - usually after a consumer has little choice but to proceed.
The Attorney General's Office received about 60 complaints about the firm since 1997.
In many of the cases, consumers had leaking or broken water heaters that needed immediate repair.
When consumers called the company, they were typically told the repair would cost between $350 to $600. When plumbers arrived, however, they always "found" some problem -- such as a code violation or other construction problem -- that required additional work.
In most cases, however, there were no such problems and the unnecessary work inflated bills by several hundred dollars.
"These contractors unfairly inflated bills and then led consumers to believe they had no choice but to pay or go without hot water," Gregoire said.
Under the settlement, the company:
- must not misrepresent the true cost of water heaters and their installation;
- must not make false claims about building permits or additional work needed to meet building codes;
- must clearly tell consumers that quotes given over the telephone don't include service call charges; and
- must no longer pay its employees on a commission basis.