November 24, 2020

Alabama reaches $60M settlement with Terminix over overcharging customers

Alabama reaches $60 million settlement with Terminix

Alabama has reached a $60 million settlement with Terminix International for systematically overcharging customers for termite services and failing to honor service contracts, Attorney General Steve Marshall announced Thursday.

The attorney general said the pest control company committed multiple violations of Alabama’s Deceptive Trade Practices Act.

“You had significant business practice fraud of Terminix that was prevalent throughout the state. You also had some unique issues involving Terminix and termite damage down at the coast,” Marshall said.

The deal will create a $25 million fund to compensate Alabama customers who were overcharged by Terminix. That fund will be replenished should the claims exceed that amount. Another $10 million will go toward additional termite treatments for over 12,000 customer homes in Mobile, Baldwin and Monroe counties. Alabama consumers who left Terminix and hired another company to provide termite protection could also receive $650 or the difference in cost between providers.

The state attorney general’s office will receive $20 million.

The attorney general’s office said Terminix had a pattern of collecting annual termite protection premiums from Alabama consumers, but not delivering promised termite protection services, and “as a result, many homes and businesses suffered termite infestation.” When customers suffered damages as a result of Terminix’s failure to provide paid-for services, the costs were passed on to consumers through dramatic price increases, the attorney general’s office said.

Marshall said he wanted to make clear that Terminix customers will not get a settlement check immediately. A process will be established to pay claims from the relief fund.

Marshall said Mobile County District Attorney Ashley Rich brought the issue to his office after receiving complaints from citizens.

“Unfair business practices like those that have been committed by Terminix cannot be tolerated in our community and our state, and it takes an attorney general with many resources to be able to handle litigation of this magnitude,” Rich said.

The Memphis-based company said a settlement would more quickly address damage claims, the Commercial Appeal reported.

“A state-sponsored, non-litigated avenue more quickly resolves damage claim disputes, which will provide immediate benefits to our impacted customers and reduce future litigated claims,” Tony DiLucente, Terminix Global Holdings chief financial officer, said in a statement released by the company.