Hearing Aid Complaints, and a Settlement in PA

On January 11, 2008, the Pennsylvania Attorney General's Office issued a Press Release, entitled "Attorney General Corbett announces agreement with Central PA hearing aid company; consumers to receive $100,000 in restitution".

A Central Pennsylvania hearing aid company has agreed to pay $100,000 in consumer restitution to resolve claims that consumers were treated unfairly when they attempted to return hearing aids within the 30-day money-back return period.

Consumers have until March 10, 2008 to file complaints to be considered for restitution.

Attorney General Tom Corbett said the Attorney General's Elder Abuse Unit reached the agreement with Riverside Hearing Services, 205 Grandview Ave., Number 203, Camp Hill, and its owner, William Kovach.

Kovach owns and operates seven hearing aid centers in Central Pennsylvania and advertises under the name Beltone. * * *

This is the nature of the complaints that were settled and the remedies that were applied:

Corbett said that Riverside Hearing Services allegedly did not treat consumers fairly, most of whom were elderly, when they attempted to return their hearing aids within the 30-day money-back return period mandated by law.

Riverside allegedly used stall tactics to prevent the customer's return of the hearing aids. * * *

Under the terms of the agreement Riverside agrees to:

• Pay $100,000 in restitution
• Extend the statutory money-back guarantee period from 30 to 60 days if a consumer presents an issue within the first 30 days
• Provide a separate written notification containing the exact date on which an aid must be returned for a refund
• Pay $25,000 in civil penalties and costs. * * *
  

For those hearing aid customers of this vendor who were affected, restitution can be requested.

Consumers who believe that they are entitled to restitution in this case can file a Health Care complaint form by March 10, 2008.

Complaints/claims may be filed via the Attorney General's website, or by calling the toll-free Health Care Hotline at 1-877-888-4877 or Elder Abuse Unit Hotline at 1-866-623-2137.

This settlement regarding deceptive sales of hearing aids is the third announced on the website of the PA AG's Office.

A Press Release dated October 27, 2005, entitled "Attorney General Tom Corbett sues Central PA hearing aid businesses and operators; Suit claims older Pennsylvanians were sold defective and useless devices", had announced settlements against multiple hearing aid vendors conducting business in numerous mid-state counties:

Attorney General Tom Corbett today filed a civil lawsuit against two hearing aid businesses and their operators accused of refusing to return thousands of dollars to mostly older Pennsylvanians 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.

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 Clinton, Columbia, Lycoming, McKean, Mifflin, Northumberland and Tioga counties. * * *

"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." * * *

Another Press Release, dated August 31, 2006, had announced the filing of charges by the PA AG's new Elder Abuse Task Force against a York County vendor of hearing aids. See: PA EE&F Law Blog posting "PA Attorney General's Elder Abuse Unit Files First Action, Makes First Arrest" (09/01/06), under the heading "Hearing aid seller sued by AG's Elder Abuse Unit".

Problems in the sales of hearing aids appear commonplace, despite consumer protection enforcement actions. Thus, a few settlements periodically should not lull consumers into complacency, but should serve, instead, as a warning for individual vigilance.

Katherine C. Pearson (email: kcp4@psu.edu), a Professor of Law at Penn State Dickinson School of Law, and Director of its Elder Law and Consumer Protection Clinic, in Carlisle, PA, drew this settlement to the attention of those subscribing to the Elder Law Listserv of the Elder Law Section, of the Pennsylvania Bar Association.

Her message places this settlement -- and the broader problems -- in perspective. I quote her comments, with permission:

The AG's agreement with one company is important but may be part of a larger need for our clients.

Penn State Dickinson's' Elder Law and Consumer Protection Clinic has represented older adults on complaints about hearing aids. In most of these cases, we've found that the problems with the hearing aids were manifest immediately, but the seller would say that "routine" adjustments would solve the problem and that "eventually" the consumer would "learn" how to wear the device.

National studies indicate that more than 50% of hearing aids are abandoned, often because of discomfort or problems that are associated with the type of device being unsuitable for the wearer (particularly true for in-the-ear devices, where a behind-the-ear device may work better but is never offered, and may actually be lower in cost). One German article I read (through translation!) described the problem particularly well -- saying that the consumer disgrace of unsuitable hearing aids was "hidden in the top drawer of many dressers."

Indeed, in the Clinic's experience, most companies will try to insist on a confidentiality agreement for settlements, which is problematical from a consumer perspective even if it is acceptable to the individual client.

A 30-day statutory "return" period for hearing aids that was intended to be pro-consumer can, in my opinion, become a tool used by some manipulative sellers to try to insulate themselves from liability. When a problem is reported promptly, the seller offers to "work with" the consumer for free for 45 days or so, and only later starts charging for additional "adjustments," thus getting themselves outside the statutory 30 day return window.

Clients may not realize that the statutory return window is only needed for returns for "any reason." Under case law, however, the 30 day window is not a defense to negligence in prescribing or fitting the device.

Certain advertising and sales practices may also trigger the consumer's right to statutory damages and statutory attorneys fees under the Unfair Trade Practices Act in Pennsylvania [PDF, 13 pages]. [Links added.]

Senior consumers having a complaint about a hearing aid purchased in Pennsylvania can file a complaint either by completing & mailing a printable Health Care Complaint Form, or by filling out & transmitting an online Health Care Complaint Form. Both forms are available on the PA AG's website, here.