Governor's Office of Consumer Protection Warns Senior Citizens Not to Fall Victim to Home Repair Fraud
ATLANTA, GA – Earlier this year a Cobb County Grand Jury charged five suspects with racketeering and accused them of conspiring to defraud 25 elderly victims of over $74,500 in a home improvement scam they ran between July 28, 2011 and February 15, 2013. Three of the suspects – Larry McGill, Nicholas Mitchell and Helen Johnson – pleaded guilty last month to racketeering and were sentenced to prison time followed by probation and ordered to pay restitution to victims. Two suspects, Rocky Mitchell and Gidget Williams, are still at large. The case was investigated by the Governor’s Office of Consumer Protection and the Roswell Police Department.
In the wake of this scam, the Governor’s Office of Consumer Protection is now placing renewed emphasis on advising elderly consumers how to avoid becoming victims when contracting for home repair work.
Home improvement scammers often target elderly homeowners. They typically initiate contact by going door-to-door and offering a seemingly reasonable price for a small repair job, such as exterior home cleaning, roofing, tree trimming or driveway sealing, as was the case with the foregoing Cobb County home repair scammers. Victims would agree to the work at the flat rate quoted. However, after the work was done, the crew would then tell the homeowners that the quoted price was actually the amount per volume of the materials or product used, and that a larger quantity of materials or product had been used than expected. Many homeowners felt they could not protest the higher amount, and so, feeling pressured or even intimidated, they would pay an amount higher – often significantly higher – than the originally agreed upon amount.
In other home repair scams, the perpetrators complete the original job but inevitably “discover” additional problems that need repair. They then overcharge consumers for that work, do a shoddy job, or take the consumer’s money without ever completing the additional repair (and sometimes without even beginning).
Here are some potential “red flags” of a home improvement scam:
- Work is unsolicited, repairman goes door-to-door. He may show checks received from other neighbors as proof of his credibility.
- Business is not listed in the local phone directory and/or contractor refuses to give out his address.
- There is no written quote/contract.
- Contractor only accepts cash as payment.
- Contractor offers special introductory offers or a discount valid only for today.
- Contractor insists that you pay in full before all work has been completed.
- Small job expands into huge job, or additional problems are later “discovered”.
- High pressure sales tactics, scare tactics or threats.
Before hiring someone to do home improvement work, consumers are advised to do the following:
- Ask friends, neighbors and coworkers for referrals.
- Contact local trade organizations, such as the Home Builders Association of Georgia, to find contractors in your area.
- Check with the Better Business Bureau in your area to see if there are any complaints against the business.
- Make sure that general contractors, electricians, plumbers and heating and air conditioning contractors are licensed. You can verify this on the Secretary of State’s website: www.sos.georgia.gov. Note that certain specialty occupations such as roofers, painters, drywall contractors and repair handymen are not required to be licensed by the state.
- Ask for three or four references of customers who had projects similar to yours.
- Get written bids from several contractors. Be skeptical if the bid is too low. Cheaper is not necessarily better.
- Always insist on a contract for work to be performed, with all guarantees, warranties and promises in writing. Agree on start and completion dates and have them written into the contract.
- Ask to see proof of insurance (personal liability, workers’ compensation and property damage).
- Consider setting payment terms in conjunction with completed stages of the job.
- When the job is done, make sure it matches the terms of the contract.
- Never pay for the entire project before the work begins. Do not in fact pay more than 25% or at most 1/3 of the total cost as a down payment. Remaining payments should be tied to completion of specified amounts of work.