New York—New York state attorney general Eric Schneiderman announced a settlement with Lowe’s Home Center over allegations of deceptive sales practices for flooring installations.
The agreement provides cash refunds of up to 10% of “per square foot” basic flooring installation fees charged to over 16,000 New York consumers and establishes new disclosure guidelines relating to “per square foot” installation charges. The agreement will return up to $1,100,000 in cash refunds to consumers and concludes an investigation into Lowe’s “per square foot” billing practices for alleged deceptive acts, practices and advertising relating to “per square foot” installation charges. Under an Assurance of Discontinuance signed by the company, it will also pay $900,000 in costs and fees to New York state.
“When consumers shop for home installation services, they deserve to be dealt with honestly and fairly—and not to be misled by deceptive sales practices that conceal the true cost of a service,” Schneiderman said.
Under the agreement’s new disclosure guidelines, prior to any consumer becoming bound to an installation contract, Lowe’s shall fully disclose how its “per square foot” installation charges are calculated, including but not limited to, identifying the actual square footage of the project, the actual square footage of the materials required and the square footage upon which the installation charges will be based. Lowe’s will also plainly disclose any charges in excess of the actual square footage of the project when per unit pricing is quoted for installation projects.
The terms of the agreement require Lowe’s to also refund up to 10% of “per square foot” basic installation fees charged to customers in New York who purchased basic installation services for covered categories between Jan. 1, 2009 and Dec. 31, 2012. These customers will receive notice by mail advising them of their right to a cash refund. Consumers will verify their identity and that they have not received a prior refund and will then receive a check valued at 10% of the total installation cost.
An investigation by the attorney general’s office revealed that since at least 2008, Lowe’s advertised installation services to consumers for several of its product lines, including carpet, ceramic tile, wood and laminate, based on a “per square foot” basis. For example, flooring has been advertised at “$1.99/sf installed” although it was not disclosed that this was based on the square footage of materials ordered, not the square footage of the project area.
To utilize Lowe’s installation services, consumers paid the company to send a third-party installer selected by Lowe’s to obtain measurements. Consumers who proceeded with the purchase of materials and installation received a credit of the measuring fee toward the total project cost. After the customer selected the Lowe’s product to be installed, Lowe’s generated a document setting forth the cost of the material required for the job and the cost of installation. Although the installation fee was by the square foot, the square footage of the room size was not disclosed to the consumer on the paperwork given, nor was the square footage of the material ordered.