Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release - Wednesday, July 23, 2003.

Contact Bill Brauch - 515-281-8772.

Miller: Avoid Storm-Related
Consumer Scams

Anti-price gouging rule in effect in Linn and Jackson Counties

DES MOINES.  Attorney General Tom Miller warned Eastern Iowans to be wary of consumer scams that sometimes strike in the wake of natural disasters like this weekend's tornadoes and severe thunderstorms in eastern Iowa.

"Home repair con-artists sometimes move in after a disaster because the conditions may give them an edge," Miller said. "There may be hundreds of people who are eager to get clean-up or repairs done, there may be a shortage of local contractors to do all the work, there may be money around because of disaster or insurance payments, and people may be in a rush to get back to normal."

Miller cautioned Iowans to be especially careful about contractors coming to their door and asking for advance payment for cleanup or repairs. "That's a recipe for rip-off. They may take your money and run and do little or no work," he said.

"We strongly urge people to work with reputable local contractors who were there before the storm and will be there after," Miller said. "Get several written estimates, get a written contract with all details and costs, and never pay large sums in advance to a contractor you don't know. Those are the cardinal rules to avoid being cheated."

Miller issued consumer tips on how to avoid storm-related scams - listed at the end of this release. Miller also encouraged consumers to contact the Consumer Protection Division,

by calling 515-281-5926, if they have consumer complaints about questionable contractors, or about

price-gouging - charging exorbitant and unjustified prices for products or services that are necessary for disaster victims.

Iowa regulations make price gouging illegal when a disaster declaration is in effect, as it is in Linn and Jackson counties. (Price gouging is defined in the Attorney General's Administrative Rule as raising prices unreasonably above the price at which the merchandise or service was sold in the usual course of business immediately prior to the onset of the emergency. Types of merchandise and services covered by the Rule include building materials, and materials, goods or services for clean up or repair. The Rule recognizes that prices may be higher because sellers also often incur increased costs. The Rule applies during the emergency declaration and "subsequent recovery period" up to six months.)

Miller said the Consumer Protection Division sometimes sees other scams that crop up in connection with natural disasters - charity scams (fraudulently soliciting donations for bogus charities purportedly to help disaster victims), advance-fee loan scams (taking money in advance supposedly to arrange a 'guaranteed' loan but never providing the loan), and con-artists presenting themselves as utility or government officials to get into people's homes for purposes of theft or other scams.

"Unfortunately, con-artists have earned a reputation for preying on people when they're down," Miller said. "Cheating storm victims is the definition of adding insult to injury. People need to be careful as they seek assistance in doing needed repairs."

Miller emphasized that he is hopeful that storm-related consumer scams can be avoided in Iowa. "Iowans are smart consumers. I'm hoping we have a sufficient number of reputable local contractors to handle the work. I think the con-artists may conclude that this is not good territory for them to try their schemes," he said.

"But an ounce of prevention is worth a pound of cure when it comes to consumer fraud," Miller said. "We just want Iowans to be careful and use their good common sense."

Miller encouraged consumers to take the following steps to avoid being victimized by a storm-related scam:

  • Be extremely wary of contractors who come to you offering repair or clean-up services such as tree-trimming or debris removal. Legitimate contractors don't generally need to seek customers. Deal with a reputable local contractor. Be wary of itinerant contractors using names that sound like local businesses. Check for local contractors listed in your telephone directory.

  • Obtain several estimates and get all estimates in writing.

  • Never pay large sums in advance if you don't know the contractor. If you have to make an advance payment for materials, make your check out to the supplier and the contractor.

  • Check out the contractor before you sign a contract or pay any money. Ask if the contractor is registered with the Labor Services Division of Iowa Workforce Development (800-562-4692, ext. 25871), or check it out online at: www.iowaworkforce.org/labor/contractor.html. Ask for local references and check them out. Call the Attorney General's Consumer Protection Division to see if it has any complaints.

  • Get all contracts in writing. Before any work begins, agree on a written contract detailing work to be done, responsibility for permits, costs, and any other promises. Request a copy of the contractor's liability insurance certificate. Put start and completion dates in writing and consequences if the contractor fails to follow them (example: that the contract could be nullified if the contractor doesn't start on time). If you sign a contract at your home, in most cases you have three business days to cancel.

- 30 -

Attorney General Home | News Release Home