By Jonathan Stempel
NEW YORK (Reuters) - Lowe's Cos agreed to refund as much as $1.1 million to New York consumers to settle allegations that it used deceptive sales practices when charging for flooring installations, state Attorney General Eric Schneiderman said on Thursday.
The second-largest U.S. home improvement retailer will provide cash refunds of up to 10 percent of per-square-foot installation fees it charged to more than 16,000 consumers from 2009 to 2012.
Lowe's will also pay the state $900,000 in costs and fees, and agreed to improve its disclosures of pricing policies, including before consumers sign installation contracts.
Schneiderman said his office found that Lowe's failed to tell consumers that it charged for installations based on the square footage of materials ordered, not the size of rooms where carpeting, tile and other flooring would be installed.
He said this enabled Lowe's and its contractors to be paid more when consumers ordered excess materials.
Lowe's is based in Mooresville, North Carolina. It operated 1,846 stores as of July 31, and said it has 68 stores in New York.
In a statement, Lowe's said it improved its disclosures about basic installation charges in 2012.
To illustrate such charges, it said 140 square feet of flooring may be needed to fit a 120-square-foot room because of the room's shape. Lowe's said the cost of basic installation will include services based on the larger amount.
(Reporting by Jonathan Stempel in New York; Editing by Christian Plumb)