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Arizona Suing to Shut Down Goettl

The Arizona Attorney General’s Office is seeking to shut down Phoenix-based Goettl Air Conditioning and a handful of other residential contractors in Arizona, accusing the companies and their parent of using illegal scare tactics and other deceptive practices in their marketing efforts.

Other companies in the lawsuit are ARS Rescue Rooter, Russett Services/ARS Rescue Rooter and American Residential Services Management Corp. and their parent company, American Residential Services LLC, also known as ARS.

Attorney General Tom Horne’s office on Thursday filed the lawsuit in Pima County Superior Court against ARS, a Delaware corporation with headquarters in Memphis, Tenn., and the company’s Arizona subsidiaries.

It accuses Goettl, ARS Rescue Rooter and the other companies of mass-mailing “false, misleading and deceptive solicitations to thousands of Arizonans throughout the year.”

The companies did not respond to calls and e-mails to Goettl’s Phoenix office and the ARS office in Memphis seeking comment Thursday.

In a 29-page complaint filed with the court, Horne’s office describes in detail and provides photocopy examples of various direct-mail pieces sent by the companies to Arizona consumers.

Descriptions of those mailers in the complaint include:

– False safety notices to frighten consumers into buying unnecessary systems and repairs.

– Official-looking solicitations that appear to be mandatory alerts from a government agency.

– Official-looking notices that mislead consumers about rebates and tax credits.

– False and misleading buyback notices and rebate notices.

Among the examples provided is a mailer alleged to have come from Goettl warning consumers of carbon monoxide and other “potentially dangerous” gases emanating from faulty air-conditioners in their neighborhoods.

“These solicitations state, with no basis in fact, that thousands of consumers’ homes may have poisonous gas and carbon-monoxide leaks,” the complaint says.

Another mail piece shown in the complaint begins with the words “IMPORTANT NOTICE” in black lettering on a white background, with the letters “AZ” surrounded by an outline of the state of Arizona in the upper-left corner of the postcard.

The mailer, which promises “federal credits and local rebates of up to $2,600,” was designed to fool people into thinking it came from the government, the complaint says.

“Consumers, especially older consumers, believe these solicitations to be official notices upon which they must act,” the complaint says.

According to online business directory hoovers.com, ARS has about 7,500 employees nationwide, generates annual revenue of about $750 million.

The company is run by Chairman Frederick Iseman, CEO Donald Karnes and President and Chief Operating Officer David Slott.

Goettl Air Conditioning was founded in 1939 by Adam and Gust Goettl.

ARS acquired Goettl in 2008 for an undisclosed sum.

The ARS lawsuit was filed two days after Horne’s office announced it had obtained a preliminary injunction prohibiting another air-conditioning repair outfit, Tempe-based Abode Air, from soliciting any Arizona consumers by telephone.

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