Water Purification Company Faces Fraud Charges

June 8, 2004
Pennsylvia's Bureau of Consumer Protection has filed a lawsuit against a water purification company and its president, accusing them of false advertising, telemarketing violations and other illegal business practices. The suit follows an investigation into complaints from 23 consumers located in Pennsylvania and Ohio.

Pennsylvania Attorney General Jerry Pappert identified the defendants as H20 Tech Inc., doing business as Hague Quality Water of Pittsburgh and its president, Richard E. Boysen. They are accused of violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and the Telemarketer Registration Act. The defendants filed for Chapter 7 Bankruptcy in September 2003.

According to investigators, the defendants through March 2003 engaged in telemarketing activities to sell their water purification systems. Consumers interested in the products agreed to an in-home presentation designed to explain the benefits of the products. The water systems consumers purchased ranged in price from $2,988 to $5,848.

During the sales presentations, consumers' tap water was tested for various conditions including "hardness" and the presence of chlorine. In each case, consumers were told by company representatives that their water had a high level of "hardness" and contained chemicals and substances that have been proven to be hazardous to their health.

"Consumers claimed that the defendants misrepresented the health benefits of their products to encourage sales," Pappert said. "For example, without scientific evidence, homeowners were told that the defendants' water treatment systems would help those who have Alzheimer's disease, acid reflux and dry skin. In reality, no test or research was done to substantiate those claims."

Pappert said other alleged misrepresentations included the defendants' claims that their water treatment systems were used by "every Children's Hospital, Red Lobster, McDonalds and Pizza Hut."

Consumers were also falsely told that the company designed its water filtration system for NASA. Still others said the defendants' claimed that Pepsi-Cola (Aquafina) and Coca-Cola (Dasani) use the defendants' water treatment systems in every plant worldwide to produce their bottled water products.

The defendants' sales presentation also included several years supply of free soap. Several consumers claimed that they failed to receive the soap products.

In addition to the alleged deceptive product claims, the suit accuses the defendants of:

• Failing to provide consumers with a "Buyers Right to Cancel" and notice of cancellation as required under state law for the sale of goods or services at a consumer's residence.
• Failing to honor its promise to issue refunds and remove the water filtration units if consumers canceled their contracts during the trial period.
• Violating the state's "Do Not Call" law by contacting consumers who names, addresses and telephone numbers were on the statewide "no call" registry.

Pending the outcome of the defendants' bankruptcy proceedings, the Commonwealth will attempt to seek restitution for consumers. The suit also asks the court to permanently bar the defendants from operating a water filtration company in the Commonwealth or any other business in violation of the Unfair Trade Practices and Consumer Protection Law.

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