The following information is from an article first published by the Iowa Insurance Division.
Home improvement problems were among the most common complaints received by the Consumer Protection Division last year, and the number of formal complaints increased 28 percent over last year.
Homeowners must be prepared for contractors’ pitches and promises and know how to respond. Our investigators hear many of the same stories from cheated consumers. Listen for these classic strategies from home-improvement contractors that can leave you without a project and without your money:
WHAT THEY SAY:
I was just in the neighborhood and I saw you need work done. I have some materials left over from another job and I will give them to you at a discount.
WHAT THEY MEAN:
I’m hoping I can charm you, make you feel sorry for me, make you think you are getting a great deal, or stay so long you will sign a contract just to get rid of me.
WHAT TO DO:
You should never hire a contractor without doing research first and this is doubly true for a contractor who solicits by knocking on your door. These contractors may be selling siding, windows, chimney repair, tree removal, yard services, asphalt, or just about anything else. How do you know you really need that work done or that the price the contractor is quoting you is competitive? How would you find him again if he does the job poorly or uses inferior products, like asphalt millings that will crack like gravel over time? A contractor driving an unmarked truck with an out-of-state license plate is a red flag because the contractor may be difficult to locate again if problems arise.
Never sign a home improvement contract (or any contract) on impulse. If you become suspicious of the solicitor, ask them to leave; if they refuse or you feel fearful, call the police immediately. A person is committing the crime of “trespass” when they come on to your property without permission, or refuse to leave your property when asked.
WHAT THEY SAY:
I can give you a big discount, but this price is only good today.
WHAT THEY MEAN:
I hoping to pressure you into this sale before you can discuss it with your family or get bids from other contractors.
WHAT TO DO:
Always get two or three bids, in writing, for any home improvement project. Don’t be pressured into a “today-only” sale price. Reputable contractors will honor their quoted price for more than a day. If it’s good only for today, walk away.
Contractors often promise discounts for customers who are seniors or veterans or will pay in cash, allow the contractor to place a sign in their yard and be a “display home,” or provide the contractor with referrals to family and friends. Homeowners shouldn’t be swayed by promises of special pricing and discounts, but instead, shop around for the best bottom-line price and terms.
Don’t let a storm-chasing contractor scare you into signing a contract before you are ready by claiming that he is getting a lot of jobs in your neighborhood and that his schedule might get filled up. Reputable contractors do have busy schedules, but it’s worth waiting to know you’ve received a fair price and have a clear, written contract between you and the contractor.
WHAT THEY SAY:
I need money upfront for materials.
WHAT THEY MEAN:
I have to pay outstanding bills from other jobs. Or worse: I need money to pay my personal bills.
WHAT TO DO:
Any well-established contractor has a line of credit to buy materials from his suppliers. Asking you to pay upfront is a red flag. Tell him you will be happy to pay the material supplier directly. If he offers another excuse, get bids from other well-established contractors who are willing to start the project without a large payment advance. Any money you give to a contractor before the work is done could end up disappearing along with the contractor.
WHAT THEY SAY:
My schedule is pretty busy, but I’ll put you in line next to have work done. We should be able to get to you soon.
WHAT THEY MEAN:
I’d rather not have any specific deadline for completion since I may or may not be able to get to your project anytime soon.
WHAT TO DO:
Agree on start and completion dates and have them written into the contract, along with what will happen if the contractor fails to meet the deadlines. Get all guarantees, promises, and warranties in writing.
WHAT THEY SAY:
All my work comes with a lifetime warranty.
WHAT THEY MEAN:
I see that you may be having doubts about my reliability and skills.
WHAT TO DO:
There is really no such thing as a lifetime warranty. What is being offered is not a warranty on the lifetime of the siding or windows, but the lifetime of the company that issues the warranty. Check to see how long the contractor has been in business under his current trade name. A contractor who frequently changes his trade name is a red flag. If the warranty is being made by the manufacturer of materials being used in the project, research the company to understand whether that warranty has value.
Why you may not get your money back
The Attorney General’s office has sued many contractors who made similar empty and deceptive promises. Getting justice is another matter, however.
Consider the case of Timothy A. Ryan, previously known as Timothy Ryan Marlow. From 2004 to 2013, Marlow and the construction businesses he was associated with racked up 135 consumer complaints for taking money and failing to fulfill contracts. The Attorney General’s office obtained two judgments against Marlow to reimburse many consumers, but he’s paid back only $6,200. The total amount outstanding to consumers for the businesses owned or managed by Timothy Ryan/Marlow equals $467,182.
Ryan is banned from the construction business in Iowa, but he continues to be self-employed in other industries, which greatly complicates wage garnishment. He lives in rental housing, which does not allow for a real estate lien.
Changing the law to protect consumers
Besides simply warning about these red flags, the Iowa Attorney General’s office wants to give consumers more ability to recover the money when deals go bad. The office has proposed a bill with the Legislature to strengthen the law involving home improvement contracts. Under the bill, a contractor must file with the state a $75,000 surety bond before entering into a home improvement project. Consumers could file a claim against the bond. The bill did not pass the Legislature this session. Learn more about surety bonds in this Consumer Focus newsletter.
Another bill that didn’t pass the Legislature this year would make home improvement fraud a criminal offense. Under the bill, the contractor would be guilty of home improvement fraud if, among other acts, he or she intentionally fails to use a customer’s money to complete a project within a prescribed time period.
To file a complaint
If you feel you’ve been wronged, file a complaint with the Iowa Attorney General. Call 515-281-5926 or 888-777-4590 (outside of the Des Moines metro area) or email consumer@ag.iowa.gov.
More information about avoiding home-improvement problems can be found on the Attorney General’s website.