COURT ENTERS ORDER AGAINST RIVERSIDE COMPANY THAT SOLD UNNECESSARY ELECTRIC REPAIRS AND DOUBLE-BILLED CONSUMERS

A federal district court judge in Los Angeles has issued an order prohibiting All County Management Services, Inc. from making false statements to induce consumers to purchase elec- trical repairs and, among other things, requiring the company to disclose cost information up front, provide written estimates and leave replaced electrical parts with consumers. The judge entered a default judgment in the case based on Federal Trade Commission charges that the firm sold consumers nationwide unnecessary electric repairs and charged their credit cards without authorization (including double-billing for service calls).

The judge's order stems from FTC charges filed in March 1994. The FTC alleged that All County Management Services, based in Riverside, was an umbrella entity under which nine other com- panies did business. All other defendants in the case, including four individuals who served as officers or principals of the corporate defendants, previously settled with the FTC.

The FTC charged that the defendants falsely touted free estimates and certified electricians in yellow pages directory advertisements in as many as 23 states. The ads displayed local telephone numbers, but callers were routed to the defendants' Riverside offices, where operators made appointments for them with electricians. According to the FTC's complaint to the court, consumers who elected not to have the estimated repairs done were charged for estimates; consumers who did authorize repair work were not advised that they would be charged for the estimate until after the work was started; and the defendants imposed an undisclosed service charge in numerous instances. Moreover, the FTC alleged, electricians routinely recommended unnecessary repairs (often telling customers that there were safety hazards in their electrical systems), and falsely repre- sented that they were affiliated with General Electric Supply Company and that they were certified by NETA (a trade association which, according to the FTC, doesn't even exist). Finally, the FTC charged, the defendants obtained customer credit card numbers on false pretenses, charged fees to the cards without authori- zation, and often billed accounts twice for a single service call.

The court now has entered a default judgment and order against All County Management Services, ordering that any funds collected on the $3.56 million judgment should be used to provide redress to consumers or, if that is impractical, deposited in the U.S. Treasury. The FTC said it is unclear what, if any, money it can collect from the defendant.

The order contains a broad provision prohibiting All County Management Services from making any false statement to induce consumers to allow electrical repairs or replacement of compo- nents or parts in their electrical systems. In offering electric replacement or repair service, or in collecting payment for such service, All County Management Services is required to disclose:

• during the initial telephone call or when costs or service dates are discussed, the rate at which labor charges accrue, and the total dollar cost of a service charge, for performing an estimate, and of any other charges except those pertaining to parts;
  
  
• the conditions and charges, if any, associated with any free estimate offer; and
  
  
• a written description of the work to be performed and an estimate of the charges, signed by the electrician and countersigned by the customer, and which states that the customer is not obligated to pay any additional charges unless he or she signs an additional written estimate, before any work begins.

In addition, the order requires All County Management Services to leave with the customer all replaced electrical parts in the condition they were in when replaced, unless the customer authorizes the electrician in writing to remove them. The order also prohibits the company from: All County Management--06/08/95)

• billing a customer's credit card account without written authorization from the customer;
  
  
• using the NETA designation in written materials or on uniforms, referring to NETA when dealing with customers, or using the NETA logo in future advertising; and
  
  
• falsely representing that General Electric Supply Company or any other entity participated in the formulation of the defendant's prices.

Finally, the judgment contains various reporting provisions designed to assist the FTC in monitoring the defendant's compliance.

Judge Robert J. Timlin of the U.S. District Court for the Central District of California signed the default judgment on May 24, and it was entered by the court on May 31.

Copies of the default judgment and other documents asso- ciated with this case are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(FTC File No. X940040)

(Civil Action No. 94-161-RT (Mcx))