ALBANY, N.Y. (AP) - General Electric Co. will pay New York consumers $780,000 and a $650,000 penalty under a court order as part of a state lawsuit claiming deceptive practices, Attorney General Eliot Spitzer said Tuesday.
Nearly 2,260 New York consumers who purchased recalled GE dishwashers in 1999 will get refunds averaging $346 under the consent order GE agreed to Monday, said Spitzer spokeswoman Christine Pritchard.
Class action and other private lawsuits have begun in other states after a judge ruled Spitzer had jurisdiction only for GE dishwasher sales in New York, Pritchard said. She said a national settlement in a California court recovered $20 settlements for consumers outside New York, which was carved out of the case. That settlement, approved by a court in September, is under appeal in part over the fairness of the size of the payments. The total payment under the settlement wasn't immediately available.
"Class action attorneys are clearly looking to what was recovered" by New York, said state Assistant Attorney General Joy Feigenbaum, who handled the case with Assistant Attorney General Christine Morrison.
Feigenbaum said the dishwashers were blamed on as many as 90 fires nationwide, including a house fire in Connecticut.
GE spokeswoman Kim Freeman said there was never a finding of intentional deception.
"Throughout the dishwasher recall, GE intended to provide clear and accurate information regarding the options available to consumers under the recall program consistent with the guidelines established by the CPSC (Consumer Product Safety Commission)," Freeman said. "While we disagree with the court's decision, we have agreed to resolve the case and move on."
She said GE has agreed to settle all 2,258 claims in New York.
Spitzer's suit began in March 2000 and accused GE of deceiving thousands of consumers into buying new dishwashers by concealing the availability of a quick, inexpensive repair that would prevent fires in the recalled models, Pritchard said.
Courts upheld Spitzer's claims of deceptive practices. In March, the Appellate Division of state Supreme Court in Manhattan upheld a 2001 trial court decision that accused GE of misleading residential customers by telling them that the fire hazard, traced to wiring in a switch in the dishwasher, could not be repaired.
In 2001, Supreme Court Justice Louise Gruner Gans wrote that the company urged consumers to scrap their machines and offered rebates of $25 to $125 toward the purchase of new GE or Hotpoint dishwashers. At the same time, GE provided commercial customers with instructions on how to fix the dishwashers.
In 1999, GE announced a voluntary recall of the dishwashers, which were manufactured from 1983 to 1989.
"So (GE) was using that recall to encourage customers to buy another produce when in fact a very quick and inexpensive repair could be made," she said.
Earlier, the company suggested the Consumer Product Safety Commission did not believe the rewiring option was an effective way of eliminating the fire hazard.
General Electric, through the Better Business Bureau, has sent out 1,756 checks to New Yorkers so far and the rest should be mailed within three weeks, Feigenbaum said.
Any consumer still owning a recalled dishwasher that wasn't rewired should stop using the machine immediately, Spitzer said. Consumers should contact GE Appliances (800-599-2929) for a free rewiring or a rebate.