You should no longer receive official-looking postcards labeled as a "safety notice" telling you that your plumbing or ventilation systems are overdue for an inspection.
Under a court settlement filed this week, American Residential Services promised to stop using those advertising tactics, start providing customers a three-day cancellation period and pay a $395,000 fine.
The upside for the company, which does business in Tucson as ARS Rescue Rooter, is that it will remain in business. The Arizona Attorney General's Office sued the company in September, accusing it of widespread consumer fraud and asking a judge to shut the company down.
Of the fines ARS must pay, $240,000 is going to the Attorney General's Office for paying restitution to customers, and $155,000 is going to pay the state's attorneys' fees.
Assistant Attorney General Noreen Matts said the settlement resolves the problematic practices that ARS employees engaged in, pointing particularly to their use of misleading ads.
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Among provisions of the settlement, ARS must:
• Give customers a written contract and have them sign it before any sale is made and work commences.
• Put in place a policy that prohibits the use of financial incentives that encourage its employees to do improper marketing or promotion.
• Ensure that technicians don't invent dangerous conditions in the customer's plumbing or ventilation equipment in order to make a sale.
Some terms are more specific. For example, the settlement prohibits ARS employees from using the poor condition of an anode rod as the sole reason to recommend the replacement of a customer's water heater without also offering the option of simply replacing the rod.
For years, ARS Rescue Rooter employees routinely told customers that their water heaters might explode and that air conditioners with minor problems needed to be replaced, according to the attorney general's initial complaint and the accounts of dozens of customers who contacted the Arizona Daily Star. Former employees blamed those and other misleading practices on requirements the company made of employees - that each call produce a minimum $300 sale, for example.
The company did not admit wrongdoing as part of the settlement, and ARS attorney Brian Schulman said the company has learned from the lawsuit.
"ARS discovered through this process that the primary cause of conflict has been due to poor communications, and not because of any intentional or abusive behavior," Schulman said in an email Wednesday night.
"This matter has caused ARS to take a fresh look at its operations, and the company is both motivated and excited about the opportunity to earn back whatever trust has been lost."
CUSTOMER RESTITUTION
To qualify for restitution, people must have been customers of ARS between Jan. 1, 2008, and Dec. 31, 2011, and they must make their complaint by June 4.
Customers who have a grievance against ARS and have not yet complained to the attorney general or the Better Business Bureau may contact the Attorney General's Office at 628-6504 or online at its website, azag.gov
Contact reporter Tim Steller at tsteller@azstarnet.com or 807-8427.