Industry News

FTC hits home builder with $2 million penalty

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California-based home builder KB Home faces a $2 million civil penalty in resolving allegations relating to the company's warranty practices, the U.S. Federal Trade Commission announced this week. FTC officials approved a modified consent decree, submitted in federal court by the U.S. Department of Justice, that requires the company to modify its existing home repair warranties and to extend some warranties issued for major home components, according to the announcement. Shaun Rachau, a KB Home spokesman, said today, "We believe we have consistently complied with the terms of the 1979 consent decree but the FTC disagrees with us on the point at issue here. We are pleased to have reached an agreement with the commission to resolve this issue and put it behind us." Rachau also said that "customer service is a number one priority" for the company. The modified consent decree states that KB Home "denies the (FTC's) allegations and states that it has been in compliance with the commission...