FOR IMMEDIATE RELEASE
NEWS RELEASE
October 2, 2015
For More Information, contact:
Luther Strange
Mike Lewis (334) 353-2199
Alabama Attorney General
Joy Patterson (334) 242-7491
AG AND AGRICULTURE COMMISSIONER ANNOUNCE SETTLEMENT
OF $987,000 TO STATE OF ALABAMA, REFUNDS FOR CONSUMERS
(MONTGOMERY) – Attorney General Luther Strange and Agriculture and
Industries Commissioner John McMillan today announced a major settlement that could
refund more than half-a-million dollars to Alabama consumers and bring nearly $1 million
to the State of Alabama. The agreement – with Guardian Pest Control Inc., doing business
as Knox Pest Control; and J.J.S.K. Solutions Inc. – also requires reforms of the companies’
business practices.
A consent decree was filed in the Shelby County Circuit Court to resolve the State’s
allegations that the companies sold termite protection agreements that violated the
Alabama Deceptive Trade Practices Act and laws and regulations of the Alabama
Department of Agriculture and Industries. The State alleges that the companies marketed
and sold warranties that offered protection against structural pests, but failed to provide
treatment or control measures to prevent those pests. As multiple current and former
customers of the companies were prepared to testify, they had no idea that State laws and
regulations deemed the protections in their existing contracts inadequate. Other allegations
involved company advertisements the State believed to be misleading. In one example, the
companies mailed an invoice to customers without termite coverage offering a termite bond
“with no start up treatment cost” even though state regulations typically require substantial
initial treatments when a termite bond is issued. In another mailer, the companies offered to
“re-treat” properties that the companies had not previously treated.
The agreement identifies 517 Alabama consumers who will receive their choice of
service credits for termite treatments and inspections, or refunds totaling $539,458. Eligible
consumers will be notified by the companies. In addition, the companies will pay $862,000
in penalties and $125,000 for attorney fees, totaling $987,000, to the State of Alabama.
Significant business reforms are being put into place to prevent the recurrence of alleged
abusive practices. In particular, the companies have agreed to revise their advertising
practices and customer contracts to enhance customer awareness, make regular reports to
the Department of Agriculture and Industries, and work to ensure all of their employees
abide by existing regulations.
–more–
501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.state.al.us
“This is an important settlement for the State of Alabama and our consumers,” said
Attorney General Strange. “It provides appropriate penalties for alleged bad practices and
will make whole the consumers who were affected by these practices. I am pleased that we
also achieved substantial reforms that will continue to protect consumers in the future. I
want to thank Commissioner McMillan for his outstanding leadership in helping to resolve
this matter.”
“By law, it is our responsibility to regulate pest control companies and protect
consumers in situations similar to this,” said Commissioner McMillan. “Our staff followed
protocol and detected violations of our regulations. The combined efforts of the AG’s office
and our department are a good example of how agencies can work together. We commend
Attorney General Strange and his staff for their commitment to protecting Alabama
consumers.”
The Attorney General and the Commissioner of Agriculture and Industries thanked
those who were involved in bringing this case to a successful conclusion, noting in
particular Assistant Attorney General Noel Barnes, chief of the Attorney General’s
Consumer Litigation Section, and Legal Counsel Patrick Moody of the Department of
Agriculture and Industries, along with Assistant Attorneys General Cameron McEwen and
Kyle Beckman of the Attorney General’s Consumer Litigation Section.
–30–
