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.

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.