The Federal Trade Commission, in its first recall in history, will have Fedders Corp. reimburse consumers who spent money trying to fix more than 40,000 improperly defrosting heat pumps.
Involved are all split-system pumps -- those which have both an outdoor compressor unit and an indoor fan -- made from November 1975, to June 1, 1978, and sold under both the Fedders and Climatrol brands.
The FTC said a switch designed to defrost the units sutomatically was defective, causing "in many cases failure of the compressor and damage to other parts." The agency alleged that Fedders was engaging in unfair and deceptive practices by telling consumers the product did not have any substantial defect when in fact it did.
The complaint, which stemmed from the problems reported by a Woodbridge, Va., homeowner, also said Fedders failed to tell owners of the heat pumps about the problem, leading owners to pay for unnecessary repairs that did not solve the problem.
Heat pumps, considered the latest in efficient temperature control equipment, are designed to cool houses in summer and help heat them in winter.
In Edison, N.J., Fedders spokesman John C. Adams said, "We have been cognizant of the problem. These collective measures have been in effect since mid-1978. This formalizes the corrective measures that we have already undertaken."
FTC staff investigators estimate the cost of each compressor replacement at $250 to $400.
The FTC has no direct recall authority. But it said the order worked out with Fedders marked the first time that the FTC had obtained a consent agreement involving recall of defective products causing economic injury to consumers.
"The agreement is also the first to provide restitution for defects occurring after expiration of a warranty," the FTC said.
Fedders must contact at least 90 percent of the heat pump owners regarding the free repairs. If it does not reach that many consumers, it will have to take out advertisements in several national magazines alerting affected parties to the possible repair and restitution.
The agency said the case stemmed from a complaint filed by Arthur Doherty, an Air Force major from Woodbridge who reported that his $3,000 pump had failed after only 18 months of operation. The FTC said Doherty checked on other homes with Fedders pumps and found "an unusually high failure rate."
Doherty said he got angry about a $300 repair bill for the heat pump, which came with the $62,000 house he bought new 1976. He decided to take on the manufacturer, Fedders, a company that had net sales of more than $300 million last year.
Doherty said of the letter required by the order: "That's just great, a fantastic letter."
When the compressor on Doherty's heat pump burned out, the company first blamed it on faulty installation, Doherty said. Later, the company acknowledged a problem and agreed in mid-1978 to pay Doherty's repair bill. He still was not satisfied.
"I was in my home no more than 18 months and they told me I'd have a $300 bill," Doherty said.
"If they'd been cooperative when it first happened, I might not have had any campaign. But their rudeness ticked me off, and besides, I saw a repair truck coming to fix Fedders heat pumps all around my neighborhood," Doherty said in an interview.
Doherty wrote consumer protection officials, sent two letters to every state attorney general asking about problems with the devices and turned over all the information to the FTC.
"Maj. Doherty provided tremendous assistance to us," said Robert Blacher, the FTC attorney who directed the investigation. "I can't count the number of times he has called me."
"When someone told me I'd have to pay $300, I just decided to do something about it," recalled Doherty. "I never had had any sort of consumer crusade. After a while it became sort of a hobby. I typed letters at home at night and made a lot of phone calls," he said.
"When I first went to the FTC, it took me about a week to find the right person. But now I feel very satisfied about it."