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State of Alabama announces ‘historic’ $60M settlement with Terminix, including $25M relief fund for customers

MONTGOMERY — Alabama Attorney General Steve Marshall and Mobile County District Attorney Ashley Rich announced Thursday that a $60 million settlement has been reached between the State of Alabama and the pest control company Terminix.

Terminix has admitted to both gouging consumers for the costs of their services, and in many cases, not even providing the level of service for which consumers were paying.

The actions constituted multiple violations of the Alabama Deceptive Trade Practices Act. The most egregious examples of improper behavior by Terminix were found in Mobile, Baldwin and Monroe Counties, but fraudulent business practices were found statewide.

“Not only did they violate Alabamians’ trust, but it is clear they violated the law of this state and now they are going to pay,” Marshall said of Terminix.

Marshall said the Terminix agreement was the largest ever “Alabama-specific” consumer settlement, noting that Alabama had been a part of some multi-state settlements that were bigger.

Rich relayed that she and Marshall began working together on the case in the spring of 2019 after her office began receiving numerous complaints and evidence of fraud regarding Terminix.

She told Yellowhammer News, “Those that were gouged, we need to make them whole,” and added that due to the different contracts used by Terminix over the years, it was difficult to provide an estimate on financial damage suffered by the average Terminix customer in Alabama.

“I commend District Attorney Rich’s vigilance in seeing that Alabama consumers’ rights are protected,” Marshall remarked.

At the state level, attorneys from the Consumer Interest Division in the attorney general’s office worked together with the Alabama Department of Agriculture and Industries. Marshall highlighted Assistant Attorney Generals Olivia Martin and Dan Taliaferro for their work.

The $60 million settlement will include a $25 million fund for Terminix customers who suffered losses.

The $25 million set aside for consumer relief will refund “consumers who were overcharged by Terminix and those consumers who were forced to pay other termite control companies money for services they should have received from Terminix,” according to a release from Marshall’s office.

The details on how consumers can make a claim for a portion of the fund will be announced “in the coming months,” per Marshall’s office, and are currently pending approval in court. Marshall said it was his understanding the fund would be replenished if exhausted by valid claims.

Another portion of the settlement, $10 million, will be spent on re-treating the homes of Terminix customers in Mobile, Baldwin and Monroe for termite protection. Marshall’s office estimates the number of homes to be over 12,000.

A big chunk of the settlement will go to the public agencies that brought about the settlement: $20 million will go to the office of the attorney general’s consumer protection efforts; $4 million will go to the Alabama Dept. of Agriculture and Industries which aided the investigation; and $1 million will go to Auburn University’s Department of Entomology which provided expertise to investigators.

Terminix will be required as part of the settlement to pay $650 to any consumer who left them and hired another company for termite protection, or pay the difference in the former customer’s new termite protection costs and their previous termite protection costs.

Marshall also described Thursday that Terminix has agreed to undergo a “reformation of business practices,” and consumers who lost their lifetime contracts will be able to get them back at the reasonable prices established in 2018.

“This is a good day for Alabama consumers,” Marshall concluded.

Henry Thornton is a staff writer for Yellowhammer News. You can contact him by email: henry@new-yhn.local or on Twitter @HenryThornton95