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Pennsylvania Sues Hearing Aid Dealers

October 31, 2005
Pennsylvania Attorney General Tom Corbett has filed a civil lawsuit against two hearing aid businesses and their operators accused of refusing to return thousands of dollars to mostly older consumers who were sold hearing aids that were defective, did not fit properly and failed to provide the hearing benefits that were promised during the in-home sales presentations.

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The lawsuit seeks nearly $125,000 in refunds and fines, plus an order barring the defendants from operating in the state until that amount is paid. The suit follows an investigation into complaints from consumers located in a half dozen Pennsylvania counties.

Corbett identified the defendants as:

• Joseph G. Pannette, 470 Treasure Lake, Dubois, Clearfield County, individually, and doing business as Bennett Hearing Aid Company and Advanced Hearing Associates Inc.

• Ricky A. Pape, 1628 Treasure Lake, Dubois, Clearfield County, individually, and doing business as Bennett Hearing Aid Company and Advanced Hearing Associates Inc.,

• Bennett Hearing Aid Company Inc., located at 1400 Northway Road, Williamsport, Lycoming County, and 1024 Washington Blvd., Williamsport, Lycoming County.

• Advanced Hearing Associates Inc., 459 River Ave., Williamsport, Lycoming County, and a registered address of 101 North Main Street, DuBois, Clearfield County.

Pannette and Pape operated the two businesses and are both licensed hearing aid fitters.

The suit accuses the defendants of violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and Hearing Aid Sales Registration Law.

"Our lawsuit will show that the defendants were in the business of defrauding older Pennsylvanians out of thousands of dollars for hearing aid devices that did not improve their hearing or their quality of life as promised," Corbett said. "Even more egregious, is the defendants' conscious decision to completely dismiss consumers' repeated requests for refunds that the hearing aid law states they are entitled to receive."

Bureau of Consumer Protection agents investigated complaints from 18 consumers who claimed that they entered into contracts with the defendants through 2005, for the purchase of one or more hearing aids. Consumers paid the defendants between $750 and $5,600 in deposits or full payments for their hearing aids.

During the sales presentation, prospective buyers were told that the hearing aids came with a 30-day return policy if they were not satisfied with the products.

The defendants also offered a two-year no-fee guarantee against product defects. If a consumer expressed dissatisfaction and requested a refund within the 30-day time period, the defendants typically offered to adjust, repair or replace the devices.

According to the lawsuit, many consumers were unhappy with the hearing aids despite numerous adjustments or repairs. Others who were promised repaired or replacement hearing aids have yet to receive the products, months, even years later.

Those who filed complaints claimed that they failed to receive any or all of the restitution that they were promised or entitled to receive under state law, despite repeated calls to the defendants.

Investigators said the defendants used a number of stalling tactics and made numerous excuses to avoid or delay paying refunds to consumers.

In some cases, the defendants extended the time period to return the products even though consumers complained that the devices didn't work properly or generated excessive noise, including a squealing sound.

In other cases, the defendants claimed that the devices needed adjustments or repairs to work properly.

One Lycoming County consumer was told that his hearing aids may have to be adjusted seven times before they would work properly. After months of adjustments, the consumer said his ability to hear grew worse with each adjustment.

The suit states that in some cases the defendants returned only a portion of consumers' refunds despite promises that they would get their money back within 30 days. In addition, the suit includes consumers who the Commonwealth claims were falsely told that they were ineligible for refunds.

In a separate count of the complaint, the defendants are also accused of charging excessive "cancellation fees" in violation of the Hearing Aid Sales Registration Law.

According to the Hearing Aid Sales Registration Law, if a consumer returns the hearing aid, the seller is prohibited from charging fees that are more than 10 percent of the purchase price or $150, whichever is less.

Several consumers claimed that they were required to sign a "disclosure agreement" that listed these alleged illegal fees for each hearing aid purchased. The fees were then deducted from their refund checks.

"Our investigation found that some consumers who returned the hearing aids were illegally charged fees ranging from $250 to $500 above what the law allows," Corbett said. "In reality, the majority of consumers would have no way of knowing what the legal fees should be. Most rely on a seller's honesty to charge the legal amount. In this case, the defendants violated that trust and deceived consumers in their 'disclosure agreement' about the fees that they were obligated to pay."

"Hearing aids are expensive for any consumer, but especially for retired or older adults living on tight budgets," Corbett said. "To aggressively overcharge and then deny these consumers refunds that they're guaranteed to receive under law is unfair and unconscionable."

The complaint asks the court to require the defendants to:

• Pay more than $50,000 in restitution to 18 consumers who filed complaints with the Bureau of Consumer Protection, plus pay full restitution to consumers who come forward with proof of similar harm.

• Pay civil penalties of $74,000, plus additional penalties of $1,000 per violation or $3,000 for each violation involving a consumer age 60 or older who files a complaint with the Office of Attorney General.

• Forfeit their right to conduct business in the Commonwealth until restitution and civil penalties are paid.

• Pay the Commonwealth's investigation costs.

The suit also asks the court to appoint a receiver if necessary to determine and collect the defendants' assets to satisfy the order.

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