From Sleazy Contractors To BedBugs - Homeowner Scams On The Rise
Tuesday, July 31, 2012
Homeowners beware. The Consumer Federation of America released
its 2011 Consumer Complaint Survey Report today, and one of
the top five fastest growing consumer complaints is home
improvement scams, which remains number 3 on the top 10 list after
automobile and debt-related scams. Other real estate problems
(timeshares, retirement communities) are new to the top 10 list
Think you're too smart to be a victim? The report includes
eye-opening anecdotes of scams from among the 38 state, county and
city agencies in 22 states who contributed to the report, with tips
on how to avoid being scammed. They recovered more than $147
million on behalf of wronged consumers last year alone. So if you
have a problem, don't be shy about calling one of the consumer
protection agencies listed on the Federal Citizen Information
Center's Consumer Action website.
If you're a homeowner (or renter), here are 10 ways to protect
Home Renovations Fraud: Shoddy construction work and contractors'
failure to complete or even start a job continue to plague
homeowners, according to the report. In one case, a Florida
elementary school teacher gave a contractor $17,000 for an
addition, but the contractor closed his business and fled the
country before doing any work. The Pinellas County Department of
Justice and Consumer Services tracked the contractor to Asia, and
then when he was later in California, arranged to have him arrested
and extradited to Florida. He made full restitution to the
Advice: Pay only a deposit when you contract for home improvement
work (some states limit the percentage of the total job price that
can be requested upfront). Get a written contract that sets out a
payment schedule, proportionate to the work to be done. Don't pay
the final installment until the work is done.
Itinerant Contractors: The Gloucester County Consumer Protection
Office in New Jersey reported fake "asphalt" repairmen who demand
payment upfront and then spray consumers' driveways with something
that looks like asphalt but isn't, and in some cases enter
consumers' homes and steal valuables. Chimney cleaning scams
operate in a similar way.
Advice: Don't hire itinerant contractors that show up uninvited at
your door. Contact the police with a description of the vehicle and
license plate number.
"Free" Home Energy Audits: One Florida homeowner was pressured into
opening a $5,800 line of credit to install an "energy-efficient
radiant barrier" in his home after receiving a postcard in the mail
purportedly from his local utility company for a "free" home energy
audit. He closed the credit line before drawing on it.
Advice: Check with your utility company-many offer free
weatherization assessment services-to make sure the services being
offered are legitimate.
Unlicensed locksmiths: The Maryland Attorney General's Office and
the California Department of Consumer Affairs both cited cases of
unlicensed locksmiths preying on victims by using low estimates,
disassembling locks, and then demanding more money to finish the
Advice: Ask your state or local consumer protection agency if there
are licensing or registration requirements for home improvement
contractors. If so, check that prospective workers are properly
licensed (you can usually check online). Get a written estimate for
services before work begins.
Home Security Alarm Scams: A 95-year-old Florida woman was
convinced to sign a 5-year alarm system contract, although she
already had an alarm system with another company. The Hillsborough
County Consumer Protection Agency intervened; the alarm company
canceled the $3,300 contract and refunded the money the woman had
Advice: Under federal law you have the right to cancel door-to-door
purchases of $25 or more within three business days. If you're not
given notice of this right, the cancellation period
Home Furnishings Never Delivered: The Somerset County Division of
Consumer Protection received 21 complaints from consumers who had
paid more than $60,000 altogether at a New Jersey furniture store
where the owner embezzled the money and never delivered the
furniture. The business filed for bankruptcy offering little
recompense for the consumers.
Advice: Pay with a credit card-that gives you the right to dispute
the charges if the goods never arrive. Debit cards don't
necessarily offer this protection.
Retirement Community Fees: When a Pennsylvania woman moved into an
assisted living facility, she paid an upfront fee of $170,100 with
the assurance that 85% would be refunded if she moved out, but when
she moved out, the facility said she wouldn't get a refund until
someone else bought her unit. The Bucks County Consumer Protection,
Weights & Measures Office intervened, and she got back
$168,644. The office found that in some cases, former residents'
units were being used as models, holding up refunds.
Advice: Review the assisted living or retirement community contract
carefully, including how the entry fee is handled-before you sign
Timeshare troubles: The Louisiana Attorney General's office is
working on a multi-state action to get restitution and cancel
timeshare contracts for consumers against Festiva, a timeshare
company based in North Carolina but operating out of New Orleans.
Consumers complained that they never received promised "prizes" and
that "free" cruises ended up costing hundreds of dollars in fees.
Consumer advocates are also reigning in folks who prey on people
who already have timeshares, pressuring them to pay thousands of
dollars to resell their unwanted timeshares, and yet another group
that offers to recover fees that consumers have paid to timeshare
resellers who have gotten no results. They take a fee and the
consumer never hears from them again. An Ohio woman who paid
$10,000 to timeshare reseller and resale recovery fee service got
help from the Summit County Office Of Consumer Affairs to recover
Advice: Don't be pressured into buying a timeshare especially if
the salesman says you have to decide immediately. Got a timeshare
and want out? Talk to the company that manages the timeshare or a
Rental Rip-Offs: The Orange County (Florida) Consumer Fraud Unit
found scammers posing as owners of foreclosed properties,
advertising the properties for rent and taking deposits of $2,500
on average from would-be tenants.
Advice: Rent through a licensed realtor, or check county records (a
call to the tax assessor works) to make sure you're dealing with
the property owner.
Bedbug Problems: Increasingly tenants are complaining of bedbug
infestations. Some landlords require tenants to pay a portion of
exterminating costs. This may be legal if it's in your rental
contract, depending on your state's law.
Advice: Check your lease for extermination clauses before you
sign. Notify landlords immediately of any insect problems,
document that you did so, and contact your local health agency.