Nest Freezes Sales of Smoke Alarm, Is Sued Over Thermostat’s Energy Savings Claims

Nest Labs quickly became a darling of both the sustainability and tech worlds for its sleek, Internet-connected thermostat and smoke detector designed to provide customers with energy savings and safety. But has the sheen finally worn off on the Palo-Alto based company, acquired by Google earlier this year?

Nest announced yesterday that it is halting sales of its Protect smoke and carbon monoxide detectors due potential safety concerns and will refund customers who want to return their current devices. Meanwhile, the company was hit with a class action lawsuit in late March, charging that Nest’s Learning Thermostat fails to accurately measure and control a home’s temperature.

Nest’s “smart” smoke detector allowed users to turn off their alarm with a wave of their hand – a useful feature when the smoke alarm sounds not from a fire, but because you burned toast or made a particularly smoky stir-fry. But during recent lab tests, Nest employees discovered that the Nest Wave feature could be unintentionally activated under a “unique combination of circumstances,” meaning the alarm wouldn't be able to go off if there was an actual emergency, Nest CEO Tony Fadell wrote in a letter on the company’s website. While the company isn’t aware of any cases of this design flaw occurring in real life, it decided to disable the Wave feature on all Protect alarms currently in use – something Nest is able to do remotely because the devices are connected to a company account and wireless Internet.

Because all Protect systems have the Nest Wave feature, the company decided to stop selling its smoke alarm until it resolves the issue, Fadell said in his letter. Fadell expects it will take at least two or three months before the company has fixed the Wave feature to operate as intended, carried out extensive testing, and obtained approval from safety agencies in the U.S., Canada and the United Kingdom. At that point, Nest will turn the Wave feature back on for its current Protect customers and resume sales of the device. In the mean time, the company’s website will provide updates on its progress, Fadell wrote.

Though the Protect alarm will continue to monitor a home’s smoke and carbon monoxide levels without the Wave feature, customers who want to return their system – which retails for approximately $130 – will receive a full refund, Fadell wrote.

“We’re enormously sorry for the inconvenience caused by this issue,” Fadell wrote. “The team and I are dedicated to ensuring that we can stand behind each Nest product that comes into your home, and your 100-percent satisfaction and safety are what motivates us. Please know that the entire Nest team and I are focused on fixing this problem and continuing to improve our current products in every way possible. If you don’t want to keep your Nest Protect smoke alarm, we will give you a complete refund.”

It is possible that Nest’s image – and future sales – may not receive too much damage from this quandary: The company is voluntarily ceasing sales and turning off the Wave feature even before an actual customer had an issue with the device. But Nest is also fielding another scandal that may hurt its environmental “cred” – a class action lawsuit over marketing claims that its smart thermostat can save customers energy and money.

Plaintiff Justin Darisse, who filed his complaint with a California federal court in March, charges that the thermostat’s base and faceplate heat up, which produces inaccurate temperature readings, Top Class Actions reported. This alleged design flaw also prevented the device from reducing the plaintiff’s energy usage and lowering his utility bills – a feature heavily touted by Nest’s advertising materials, the lawsuit says. The lawsuit seeks $5 million for the hundreds of thousands of individuals who purchased a $250 Nest Learning Thermostat, according to Gigaom. There was no letter from Fadell, famous for helping Apple design the iPod and iPhone, on this issue.

Image credit: Nest

Passionate about both writing and sustainability, Alexis Petru is freelance journalist based in the San Francisco Bay Area whose work has appeared on Earth911, Huffington Post and Patch.com. Prior to working as a writer, she coordinated environmental programs for Bay Area cities and counties. Connect with Alexis on Twitter at @alexispetru