Lowe’s Home Centers in Ogdensburg, Potsdam and around the state agree to give some customers cash back on flooring installations over ‘deceptive practices’

A settlement with Lowe’s Home Centers in Ogdensburg, Potsdam and 62 other locations in New York State over allegations of deceptive floor installation practices will provide some refunds for eligible customers from 2009 to 2012.

The agreement, announced by state Attorney General Eric T. Schneiderman, provides for a total of $1,100,000 in cash refunds of up to 10 percent of per-square-foot basic flooring installation fees charged to over 16,000 New York consumers.

The announcement from the AG’s office said the agreement establishes new disclosure guidelines relating to “per square foot” installation charges. The agreement concludes an investigation into Lowe’s allegedly deceptive acts and practices and deceptive advertising for those installation charges. Lowe’s 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,” said Schneiderman. He said the agreement will result in clear disclosures being made to customers. “We expect others who advertise for flooring installation to follow the model practices outlined in today’s agreement.”

Lowe’s now will fully disclose how its “per square foot” installation charges are calculated, including identifying the actual square footage of the project, the actual square footage of the materials required, and the square footage on which the installation charges will be based. Lowes’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, Schneiderman said.

The terms of the agreement require Lowe’s to make those 10 percent refunds 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.

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 carpeting, ceramic tile, wood/laminate flooring (the “Covered Categories”).

Lowe’s is said to have offered, at times, these products for installation 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 Lowe’s to send a third-party installer selected by Lowe’s to measure the project and 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(s) size was not disclosed to the consumer on the paperwork given to the consumer, nor was the square footage of the material ordered. The installation charge was calculated roughly upon the amount of material ordered, not the size of the project. This was not disclosed to the consumer.

The Attorney General alleges that in contrast to the explanations proffered to customers for the need to purchase material in excess of the actual square footage of the project area (and their ability to return unopened excess product for a refund), Lowe’s did not systematically explain to customers that per-square-foot installation fees also applied to the material in excess of the actual square footage of the project area. Rather, Lowe’s typically only provided the consumer with a lump-sum installation charge. Consumers were not regularly provided square foot measurements by Lowe’s unless the measurements were specifically requested. Lowe’s and its contractors received higher remuneration from consumers by calculating the installation charge based on the total amount of product ordered, rather than the actual square footage of the project area.

The office is continuing to investigate other home center stores that fail to properly disclose the true cost of home improvement installation services..

This case was handled by Deanna Nelson, Assistant Attorney General In-Charge of the Watertown Regional Office. The Watertown Regional Office is part of the Division of Regional Affairs led by Executive Deputy Attorney General for Regional Affairs Marty Mack.