Plumb Serve and Electro Serve to Refund Consumers
SEATTLE – The owners of several Bellevue businesses that sent official-looking postcards to homeowners urging them to have their hot-water tanks or electrical panels inspected agreed to issue refunds to consumers as part of a settlement, Attorney General Rob McKenna announced today.
The Attorney General’s Office accused Rodney E. Jessen and his son, Gary J. Jessen, of mailing more than 154,350 postcards to Puget Sound residents in 2005 as part of a marketing campaign that misled consumers into believing that they must pay for a safety inspection. The Jessens together own and operate businesses under the names Plumb Serve, Electro Serve, Ben Franklin Plumbing and CDS, Inc. Rodney Jessen also conducts business as One Hour Heating and Air Conditioning.
“Businesses must be upfront when marketing their services,” McKenna said. “They can’t design their advertisements to look like official notices from a government agency, utility company or appliance manufacturer. The defendants in this case sent postcards that had the potential to deceive many consumers into believing they had to schedule an inspection of their hot-water tank or electrical panel to avoid damage.”
The Attorney General’s Office alleged the mailers violated the Consumer Protection Act. One mailer suggested that the recipient was entitled to a “refund credit” that must be used before a certain deadline. Another version provided a vague reference to “NEMA 10.3” – an industry standard set by the National Electrical Manufacturers Association. The postcards did not state that consumers who requested an inspection would be charged, typically $86.
The settlement filed last week in King County Superior Court concludes an investigation that began in 2005 and subsequent settlement negotiations. Under the terms of the agreement, the defendants did not admit any wrongdoing but agreed to contact and refund customers who paid for an inspection in response to receiving a postcard. Customers must submit a claim in order to receive a refund.
The Attorney General’s Office estimates 409 consumers, mainly in King County, are eligible for reimbursement.
The defendants also agreed to pay $30,000 in civil penalties, with $25,000 suspended provided they comply with the settlement terms including injunctions that limit how they can advertise. They must also pay $26,000 in attorneys’ fees and costs.
Under the terms of the settlement, the defendants must include the word “advertisement” on all future promotional mailers. They can’t disseminate advertisements that appear to be official notices or imply they have a prior or existing relationship with a consumer.
They also must not offer rebates unless provided directly by a product manufacturer or represent that a service is “free” unless it is provided at no cost. In its complaint, the state alleged that the defendants, excluding Electro Serve, misrepresented that certain services were “free” that were actually provided as part of a paid membership in a preferred customer plan.
CONSUMER REFUNDS: The defendants will contact Washington consumers who are entitled to refunds under the settlement and provide a list of names of eligible consumers to the Attorney General’s Office. Consumers will be contacted in batches starting this month and continuing through fall or early winter. Consumers must then respond to the company in writing to request a refund. Consumers who have additional questions about the settlement or refund procedures can contact the Attorney General’s Consumer Protection Division at 1-800-551-4636 between 10 a.m. and 3 p.m. weekdays.
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Media Contacts: Kristin Alexander, Media Relations Manager – Seattle, (206) 464-6432
Shannon Smith, Assistant Attorney General, (206) 389-3996