NJ Division of Consumer Affairs Prevails in Suit Against Duct Cleaning Companies; More than $1.7 Million in Penalties and Restitution Ordered for "Bait and Switch" And Other Unconscionable Practices
NEWARK - A Superior Court judge has ordered two Bloomfield-based air duct cleaning companies to pay more than $68,000 in consumer restitution and more than $1.7 million in civil penalties, for "bait and switch" tactics and other unconscionable business practices alleged by the Office of the Attorney General and State Division of Consumer Affairs.
The Division, in its investigation of United Air Care and Indoor Air Care, identified more than 1,200 violations of the State Consumer Fraud Act and regulations on advertising and home improvement contractors. The violations affected a total of 98 consumers who filed complaints with the Division.
Many consumers contacted the companies after receiving direct-mail coupons through advertising services, such as "Super Coups" and "Clipper Magazine," which advertised "Whole Duct House Cleaning" for prices from $37.95 to $69.95. The Division alleged that the companies often failed to perform the services for the specified price. In many cases, the coupons were allegedly used to bait the buyer into purchasing higher-priced services.
The Division also alleged that the companies failed to register with the State as home improvement contractors, and in many cases caused damage to consumers' homes, then failed to fix, clean, or compensate for the damage.
"There is no excuse for such flagrant violations of New Jersey's Consumer Fraud Act," Attorney General Paula T. Dow said. "We will aggressively continue to pursue those who target New Jersey homeowners with unconscionable business practices, deceptive advertising, and false promises."
The Final Judgment by Default and Order, signed March 31, 2011, orders the companies to pay $68,157.36 in consumer restitution, $1.71 million in civil penalties, $58,539 in reimbursement for the State's attorneys' fees, and $7,629.05 for the State's investigative costs.
The Division of Consumer Affairs began investigating United Air Care in April 2008. The company supposedly ceased operations in approximately mid-2008, after which Indoor Air Care commenced operations with the same business address, phone numbers, employees, and ownership as United Air Care. The Division expanded its investigation in July 2008 to include the new company.
"It is exactly because of abuses like these, that we have launched a new, statewide crackdown on unregistered home improvement contractors," said Thomas R. Calcagni, Acting Director of the Division of Consumer Affairs. "If you are a contractor, you will comply with the law or you will pay. If you are a consumer, before signing a contract for home improvement work you should make sure the contractor is registered, and learn as much about the contractor as you can."
The Division alleged that United Air Care and Indoor Air Care violated the New Jersey Consumer Fraud Act, Contractors' Registration Act, Contractor Registration Regulations, Home Improvement Regulations, and Advertising Regulations by, among other things:
- Offering specific air duct cleaning services, where the purpose or effect of the offer was not to sell those services, but to bait or entice the buyer into the purchase of other or higher priced services;
- Providing direct-mail coupons that offered specific duct cleaning services at a specified price, and then failing to provide the services at that price;
- Failing to register with the Division as a home improvement contractor and then advertising and/or performing home improvement work;
- Failing to include in home improvement contracts cancellation language, the total price and/or the date or time period within which work was to be commenced and/or completed;
- Requiring that consumers sign estimates and then failing to provide consumers with a full and accurate copy of the documents;
- Misrepresenting that a consumer would receive a refund or reimbursement; and
- Causing damage to a consumer's home while performing air duct cleaning services and then failing to fix, clean, or compensate for the damage.
Calcagni noted that consumers who purchase duct cleaning or other services on the basis of a coupon should be aware that the price may increase, and should get the total price in writing before the job starts.
Home Improvement Contractors
The State Division of Consumer Affairs' new crackdown on unregistered home improvement contractors began last month and will continue through the summer. To date, 18 home improvement contractors have been administratively charged for operating outside the State's registration law, and 76 contractors have received 30-day warnings. Those contractors that receive warnings have 30 days to come into compliance or face fines up to $10,000 per violation.
In 2010, complaints about dishonest home improvement contractors were the second most common consumer complaint filed with the Division of Consumer Affairs. They represented 1,401 of the 13,761 consumer complaints filed with the Division last year.
Before hiring a home improvement contractor, New Jersey consumers are urged to:
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
- Obtain the contractor's State registration number, which always begins "13VH."
- Contact the State Division of Consumer Affairs to learn whether the contractor's registration is still valid. Call the Division's License Verification Line at 973-273-8090, or check the Division's database of all 43,000 registered home improvement contractors at http://www.NJConsumerAffairs.gov/LVinfo.htm.
- Ask the State Division of Consumer Affairs whether there are any consumer complaints filed against the contractor.
- Demand a copy of the contractor's liability insurance policy.
- Contact the insurer to learn whether the policy is still valid.
Deputy Attorney General Nicholas Kant of the Consumer Fraud Prosecution Section represented the state in the action against United Air Care and Indoor Air Care.
View Final Judgment