Sued for bad reviews on Angie’s List – what happened? (Updated)

Back in March I wrote a post about homeowners getting sued for bad reviews on Angie’s List and have been wondering what happened … I hadn’t seen any follow up stories until reading Eric Goldman’s Technology & Marketing Law blog. Since then I’ve found more info and this post has been appropriately updated.

To recap, home improvement contractor Stephen C. Sieber ( SCS Contracting Group ) launched multi-million dollar defamation lawsuits against 2 homeowners who wrote negative reviews (with F ratings) on Angie’s List, as originally published in this Washington Post story.

So what happened? According to the recent John Kelly article, Sieber dropped the lawsuits against the home owners. The lawsuits (Sieber v. Mattera and Sieber v. Hammock ) were settled and dismissed without prejudice a month after filing meaning that they agreed to settle but without setting any precedents. Sieber could technically sue the homeowners again for the same reason. From answers.com:

A plaintiff is not subsequently barred from suing the same defendant on the same cause of action when a court grants a dismissal without prejudice of his or her case. Such a dismissal operates to terminate the case. It is not, however, an ultimate disposition of the controversy on the merits, but rather it is usually based upon procedural errors that do not substantially harm the defendant’s rights. It effectively treats the matter as if the lawsuit had never been commenced, but it does not relieve a plaintiff of the duty of complying with the statute of limitations, the time limit within which his or her action must be commenced. A dismissal without prejudice is granted in response to a notice of dismissal, stipulations, or a court order.

Meanwhile, Monica Hammock’s $83,000 civil lawsuit against Stephen Sieber for damage done during her home renovation is still ongoing.

Interestingly, it seems that Sieber has been representing himself in the proceedings as his lawyer is listed as “PRO SE”. Maybe business has been a bit slow lately? Lawyers are pretty expensive.

Sieber wasn’t going to initially sue Angie’s List (as reported in the Washington Post) but ended up doing so for “malicious interference”. He was upset with the “consumer alert” Angie’s List sent out about him and charges that it

“was used solely as a public relations ploy to gain more market exposure and revenue for Defendants, at the expense of the business and reputation of SCS Contracting Group and Stephen C. Sieber personally.”

“I’m standing up for all the service providers who this will not happen to, ever.”

You can see the full details of the lawsuit at www.angiegotsued.com.

Several Angie’s List principals were named as defendants in the suit (including Angie Hicks herself) but they were subsequently dropped. Sieber is still suing Brownstone Publishing however; Brownstone “does business as” Angie’s List. You can monitor the online court records by going to:

https://www.dccourts.gov/pa/

and searching by case number.

  • Sieber v. Mattera – Case # 2007 CA 002063 B
  • Sieber v. Hammock – Case # 2007 CA 001726 B
  • Hammock v. Sieber – Case # 2006 CA 006940 B – pending
  • Sieber v. Brownstone Publishing -Case # 2007 CA 002549 – pending

160 Home Improvement Contractors nabbed in Connecticut Spring Sting

News earlier this week from Connecticut’s Department of Consumer Protection. The DCP’s 7th sting operation netted 150 unregistered contractors. 10 other contractors were cited for illegal contracts or contract language violations.

The unregistered contractors will be notified by mail of their violations, pay $500 in fines, and have to register with the state according to the Connecticut Post. The Post article also raises some valid concerns:

That so many were caught is a sign consumers need to be wary when hiring contractors, according to consumer protection officials and business leaders. But, they added, the very regulations being violated might also be driving up the costs for legitimate businesses and opening up the opportunity for a sort of black market of home improvement services.

But the last word should go to DCP Commissioner Jerry Farrell Jr.:

“These operations also serve as a reminder to consumers that while the Department administers the Home Improvement Guaranty Fund which provides up to $15,000 to victimized consumers, the money is only available to homeowners who have used a registered contractor. That is why it is so important to verify your contractor’s registration before signing any contract or giving them any money.”

Props: The Connecticut Post.

Read the Connecticut Department of Consumer Protection press release.

Pennsylvania – stronger protection from home improvement fraud is on the way

Pennsylvania has new legislation in process to establish better consumer protection for homeowners.

Bill highlights:

  • a state-wide home improvement contractor database
  • written contracts required for all jobs over $500
  • the scope and cost of work be set out in the contract and clearly understood by the customer
  • makes home-improvement fraud a criminal offense
  • with stiffer penalties for scammers who target seniors

Although receiving senate passage is promising, the bill won’t become law until approved by the House of Representatives and Governor Ed Rendell.

Pennsylvanians should also note the gotchas:

For a contract to be enforceable against a customer, it would have to be signed by the customer and dated, and disclose the approximate time frame of the work and materials to be used, as well as the specifications and description of the work. It would also have to include the total sales price.

In addition, a contract would be voided if it has a clause that releases the contractor from building code requirements or liability, or that strips the customer of legal rights.

Source: phillyburbs.com.

New York’s Consumer Protection Board investigates Home Improvement Industry

I love New York. The New York State Consumer Protection Board’s Home Improvement Initiative is on. The CPB hopes to better protect consumers while encouraging opportunities for contractors through a multi-step process.

Phase one involves online surveys for both homeowners and home improvement contractors plus making a comprehensive hire-a contractor tips complete with model contract package available online. Phase two, the public hearings, are now in progress.

Watch the video report or read the source story on News 10 Now. Plus another news report on Channel 9.

Read about New York’s Home Improvement Initiative on the New York State Consumer Protection Board website or call the Board directly at 1-800-697-1220. You can still have your say – take the CPB Homeowner Survey online. If you are a home improvement contractor, you may want to take the Contractor Survey.

I do admire the CPB for the effort. But if I was a contractor, I might not be enamored with the Contractor Survey questions which are all about qualifications / credentials; the survey reads like a reference check more than a way for contractors to join in a constructive discussion on how to improve the situation. What contractor in his right mind is going to put down he’s an unlicensed contractor then his name and address in case they want to contact him??

But it’s the thought that counts right?

Mike Holmes, Marketplace & Max Pies – How not to get nailed by bad contractors

While researching hiring home improvement contractors, I stumbled on this insightful online video featuring Mike Holmes of Holmes on Homes on CBC Marketplace, a Canadian consumer affairs / investigative journalism show.

How not to get nailed … No one sees more renovation ripoffs than Mike Holmes. Marketplace uses hidden cameras to expose a contractor responsible for the latest disaster he’s fixing.

Marketplace sets the Sting

“The real deal on Home Contractors … Home Improvement Horrors … Hidden Camera Job Quotes … Who to trust … One very questionable character.” Oh boy, I can’t wait.

The show seemed to have 2 goals. First to set up a “test” to illustrate to viewers how to weed out the good from the bad contractors, what to look for. And second, to “bait a trap” for one particularly bad contractor (Leo Dos Reis of Max Pies Home Improvements), who crops up time and time again in complaint email to Mike Holmes from disillusioned homeowners.

The contractors job quote and interview segment is instructive and revealing but not terribly surprising. None of them quite measured up to Mike Holmes’ wish list … but then his standards are pretty high.

The Max Pies expose and sting operation, however, is brutal. Mike Holmes investigates the job and points out how the home is now unsafe, how the room built for the family baby could endanger her health, and how the house doesn’t meet building code.

Wendy Mesley of Marketplace interviews unhappy homeowners. And investigates the misleading Max Pies web site which is revealed to use photos of work by other contractors without their permission. How one contractor has tried repeatedly to have his photos removed even to the point of engaging a lawyer, without success.

A Very Questionable Character Caught in the Act

Leo Dos Reis, the owner of Max Pies Home Improvements, is the “very questionable character” mentioned in the teaser. FYI, Max Pies Home Improvements in Canada is not affiliated with the similarly named US flooring company.

Leo Dos Reis - Are you licensed?

The piece de resistance is the video sting of Dos Reis in action – the sales pitch, the misleading actions and statements about his license and qualifications, the customers he claims to have worked for who’ve never heard of him, the protestations about his reputation, the over-priced estimate, and the high pressure sales tactics.

Turns out Mr. Dos Reis has been charged with 14 counts of fraud. Marketplace tried to meet with him but he beat a hasty retreat when he saw the cameras. Apparently, he was supposed to be in court again last week. I checked out the local home improvement rating & reviews site and he has a solid 3 Star Rating in spite of the above. Interesting. Very interesting indeed.

Summary Judgment

Five Star piece of reporting by Marketplace, irrespective of the city you live in; highly recommended viewing if you are considering hiring a home improvement contractor.

The episode originally aired in January but you can see all the videos on the Marketplace site – including a March update on the story. Apparently Dos Reis is now running Platinum Home Renovations – with the same photos and content. He is still also going to court. All of which makes him Canada’s poster boy for bad home improvement contractors. You can find out more about the charges by searching the Consumer Beware database for “Max Pies” then clicking on DOS REIS, LEONARDO. Searching for “leo dos reis” won’t bring anything up, due to the way the search is designed.

DOS REIS, LEONARDO
CRIMINAL CODE – CCC – FRAUD, 13 CHARGES ON 2006/05/03
CRIMINAL CODE – CCC – ATTEMPT FRAUD, 1 CHARGE ON 2006/05/03
CRIMINAL CODE – CCC – FRAUD, 1 CHARGE ON 2007/04/04

For more info about crusading contractor Mike Holmes check out the Mike Holmes -Wikipedia entry and the Holmes on Homes website. Holmes on Homes airs on the Discovery Home channel in the US and HGTV in Canada.

More Home Improvement Scams in the News

Spring is scam time. Many state consumer protection agencies are issuing warnings to the public.

The Oklahoma Attorney General’s office is advising seniors to be careful of door-to-door home improvement contractors and loan schemes that require up-front fees.
Mallery Nagle, Edmond Sun

In Tennessee, the sheriff’s office has warned about traveling con artists being back in the area. They tend to drive plain, unmarked white utility vans. “They usually get out when the weather breaks, when they can get out and do the work outside …”, according to the sheriff.

“It’s not good work in that it won’t last,” Burns said. “They’ll mix materials together that the rain will wash away. They’ve always used diesel fuel to mix with silver paint to paint a barn roof. You can drive around and spot a barn roof, you’ve got silver and black streaks where the rain has washed it down.”

Burns says the same hold true for driveway sealer. “That’s what they do to make the material go further,” Burns said. “The diesel fuel will mix with the driveway sealer, and it looks good. It’s shiny and pretty, and you know, when it rains it’s gone.”

The Ohio Consumer Protection department expects to receive 25,000 home improvement scam complaints in 2007. Warning signs to look out for:

  • scare tactics – always get a second opinion
  • the bait and switch – beware the price that suddenly goes up
  • the “model home” discount
  • the “referral sale” discount – this is illegal in Ohio & other states

Read more at The Advocate, Newark Ohio.

Here is a great example of the bait and switch. You receive a coupon in the mail for a low price for duct cleaning but the actual bill is $1000 plus, usually for unnecessary repairs, such as claiming you have asbestos when it’s actually just fiberglass.

Another home improvement scam example? In this story, the scam artist posed as sales representative for a real renovation company; collecting money on behalf of the contractor without his knowledge.

For more info, see my previous post The Current State of Home Improvement Scams.

Homeowners get sued for bad reviews on Angie’s List

Interesting column by John Kelly on the Washington Post about 2 different homeowners being sued by the same home improvement contractor for defamation. Monica Hammock is being sued by Stephen C. Sieber, owner of the SCS Contracting Group operating out of Maryland for $6 million “charging that she made false and defamatory statements on Angie’s List with the intent of damaging his reputation.” Another reviewer, John Poole, is also being sued.

Interestingly, Angie’s List is not being sued.

Sieber said that he’d like to sue Angie’s List but that his attorney tells him it’s protected. So he’s going after Hammock and Poole instead.

This surprised me … because when I consulted with a lawyer recently about related issues, reviews and defamation came up for discussion. My lawyer said to be wary, that a review site could possibly be held responsible for “promulgating” the defamation of a bad review.

Maybe Angie’s List is protected by their standard User Agreement which states:

“I acknowledge and understand that I am solely responsible for all reporting information submitted by me to Angie’s List in connection with my membership, and that Angie’s List bears no responsibility whatsoever for statements made by me or anyone acting on my behalf. I agree to defend and indemnify Angie’s List if it is finally determined that the reporting information I provided to Angie’s List was false and inaccurate.”
– Angie’s List standard User Agreement

If Angie’s List was a news site, then it would be protected under “freedom of the press” where to prove defamation, you must also prove malicious intent. Angie’s List didn’t write the reviews any more than any other published reviews so no malicious intent. But is Angie’s List the press? Probably not …

I emailed the writer John Kelly for more information. Why is Angie’s List protected from being sued? Mr. Kelly wrote back “… his lawyer told him that the FCC’s Communications Decency Act protects web sites …”. I did some digging and there seems to be something in this – the courts have upheld that the CDA of 1997 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service”. Well ya learn something new every day. Thanks John for the prompt reply.

With “social media” and the rise of the “review culture”, it’s easy to forget you are responsible for what you write on the web – reviews are commonplace now. But did you realize that every time you write a review online, the fine print says you are legally responsible, not the site hosting your review? They may “own” your content as soon as you press the submit button, but if someone complains, they will say you are responsible.

If what you have to say in the review is true, then it’s not defamation. But it’s still a stressful – and expensive – situation to be in. The article mentions that Angie’s List “might help with Hammock and Poole’s legal bills”.

Let’s just say I’ve spent some time in the home improvement review business in my former life. From direct experience (stats!), the majority of homeowner reviews are positive. Writing bad reviews is not something homeowners take lightly. It wasn’t unknown for a homeowner to have a bad contractor experience, write a review about it, then have second thoughts before publishing. Other times homeowners have changed their minds after being contacted by the contractor or a lawyer. If the contractor handled the situation as a “customer service” matter, homeowners often upgraded the review of their own accord because of the efforts made to resolve the matter. So based on first-hand experience, bad reviews are more likely to be underreported, not the other way around.

Yet Mr. Sieber had bad reviews from unconnected Angie’s List reviewers. That’s a red flag for me. Furthermore:

In 1990, Sieber was the subject of a segment on ABC’s “Primetime Live” in which Diane Sawyer wondered whether he should be dubbed “the Contractor From Hell.” In 1992, after complaints from homeowners, he signed a settlement with the Montgomery County Office of Consumer Affairs, agreeing to cease home improvement work for three years.

Sieber told me that he’d rather not comment on his Montgomery problems. “That goes back to a company long, long ago that has nothing to do with [the current case],” he said.

Big red flag. He says that stuff is way in the past. And Ms. Hammock’s problems occurred in 2003.

Well what about this Better Business Bureau Reliability Report that says Mr. Sieber has had 5 complaints lodged in the last 36 months?? To be fair, most of these have been resolved and no complaints in the last 12 months. But overall, there seems to be a trend here.

The irony? Mr. Sieber was interviewed by another writer from the Washington Post about homeowner-contractor relationships just a few months ago, not as an offender but as a contractor commentator. Uh, doesn’t the Washington Post check references? Kidding!

Anyway, here’s what he had to say about the homeowner-contractor relationship:

“It’s sort of like a marriage,” said Stephen Sieber, owner of SCS Contracting Group in Burtonsville. “There’s a lot of different people and a lot of different variables. It’s a challenging situation.”

Sounds like Mr. Sieber is in need of a little “marriage counseling”, and then some.

Home Depot Exposed – Gouging Customers for Remodeling Projects

For some people, the Home Depot brand is synonymous with Home Improvement. But in the last few months, at least in California, the once trusted brand has become associated with far less desirable words – “nightmare”, “horror story”, and now “fraud”.

Home Depot is being investigated by KNBC in Los Angeles for ripping off customers.

KNBC (NBC4 TV) reports that these allegations are backed up by statements from Home Depot insiders (former salespeople and subcontractors).

NBC4 has heard from customers in 22 states and from insiders from across the country, who have given NBC4 a paper trail of internal documents, suggesting the company overcharges customers on window and siding installations, kitchen remodels and on roofing jobs.
Joel Grover and Matt Goldberg, NBC4 TV

In October 2006 when the investigation started, KNBC’s focus was on service issues in California. Now, it’s gone all the way to outright fraud, with complaints from across the nation.

Home Depot’s response to this latest charge has been to apologize for the situation and promise to investigate. “We have no practice overcharging customers in any way, shape or form”.

It’s a fascinating, if unsettling, read. The video should be up later this morning.

Home Depot Investigation – Part 3 – Article and Video on NBC4 TV

Home Depot Investigation – Part 2

Home Depot Investigation – Part 1

Texas to get tough on Home Improvement Contractor Fraud

New legislation has been introduced to overhaul the Texas Residential Construction Commission. Bill 1686 is designed to give more protection to homeowners and seniors in particular.

The bill highlights:

  • all home builders to be registered with the TRCC
  • all home improvement contractors doing work over $2500 to be registered
  • free TRCC complaint process for homeowners
  • criminal charges can be laid against offending contractors
  • establishment of a recovery fund to help provide relief from certain types of damages
  • much more …

From a statement released by the Texas House of Representatives:

There are many reputable builders and remodeling contractors who do a good job on home improvement projects. For those who don’t, we’re putting some teeth in the law so that homeowners will be protected … There have been too many horror stories of contractors who have taken money from elderly homeowners and left the job half-done, or not done at all. This Bill would put a stop to that kind of scam.
State Representative Ruth Jones McClendon (District 120, San Antonio)

Read the actual Bill (PDF).

Rep. McClendon’s Press Release.

Detailed report on HomeOwners for Better Building, a consumer action site.

The Current State of Home Improvement Scams

“… fraud is nothing more than the skin of the truth stuffed with a lie.”
Elliot Minkman, reformed con man

Here are a few current Home Improvement scams to be aware of and obviously avoid.

The Home Improvement Grant Scam. You are notified by mail that you are eligible to receive a Federal Grant for home improvement, medical bills, or other expense – the first installment cheque may even be included. Or perhaps you see an ad for such a grant in a local newspaper. All you have to do is call the 1-800 number to claim the grant, it’s “free” to apply. Once you get on the phone and start giving your information (including license and social security numbers, even account numbers for financial institutions), you acquire extra “service charges and handling fees”. No matter what the pitch, the goal is to get you to pay that “one time” handling fee

Sounds too good to be true. So why do people get taken in? I see two factors. First, the pose as a “government representative” causes people to drop their guard. Government rep = credible authority figure. More importantly, it’s the lure of “free money from the government”. We’ve all heard about it, so that’s the “truth” that makes the lie persuasive.

The Federal Trade Commission issued an alert on this late last year. You can read more on combating such scams on the FTC website – Free Government Grants: Don’t Take Them For Grant-ed.

Home Improvement Contractor Scams. Seniors are often the target of these “door to door” scams. Professional scam artists (as opposed to real, hardworking contractors) may knock on your door offering to do repairs that may or may not need to be done. They may offer to fix or redo your driveway for a substantial fee but actually only paint it black and leave. Or arrange to do a roof repair, take a deposit, never to return.

They can seem very convincing. In one “worst case” news report, the scam artists posing as roofers went so far as scale the roof to bring down a shingle to prove to the 80 year old prospect that the roof needed repair. So she trusted them, let them inside … only to be robbed at gunpoint.

Obviously all the usual “rules” about hiring contractors should apply. So why are seniors more vulnerable? There’s a lot of information on this topic … and it may all be relevant. But at the bottom of it all, I think it’s because the average senior may not be able to physically do as much as he or she used to. In that way, seniors can be more dependent on help from other people and good help is hard to find. When it shows up at your front door, well why not??

Read more about how to complain if you are the target of home improvement or other fraud.

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