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Consumer News Release

For immediate release -- Thursday, March 15, 2001.
Contact Bob Brammer, 515-281-6699

Attorney General Cracks Down on Home Repair Fraud

A concerted effort has netted over $250,000 in consumer refunds.

In Ottumwa case, a contractor was jailed for contempt of court and ordered to pay restitution to customers whose money he took without doing the work.

The Attorney General's Consumer Protection Division is mounting a concerted effort to curb home repair fraud.

"The classic problem occurs when a questionable contractor takes a large sum of money in advance to do a job but never does the work," said Attorney General Tom Miller. "The huge majority of contractors in Iowa are capable and honest, but a few bad apples can really cause problems for people," he said. "They can cause big losses and big headaches."

Last year the Consumer Protection Division obtained more than $250,000 in refunds for consumers who filed complaints against contractors, as well as orders for contractors to complete work or honor guarantees. The division also filed lawsuits, issued investigative subpoenas, and obtained various court orders and formal agreements to resolve cases.

Miller said warm Spring weather usually brings a jump in home repair activity and complaints. He advised people to use reputable contractors, have written contracts, and avoid paying large sums in advance. He also said Iowa law gives consumers three days to cancel a contract signed at their home or some other location away from the contractor's regular place of business.

Ottumwa Case

An Ottumwa case filed by the Consumer Protection Division illustrates measures that can be taken in cases of alleged fraud. Last fall, Polk County District Court Judge Scott Rosenberg found that Ottumwa contractor Gary Allen O'Dell violated the Iowa Consumer Fraud Act when O'Dell demanded advance payment on home repair contracts for siding and roofing jobs and then never performed the work. Rosenberg ordered O'Dell to reimburse a total of $5,300 to two consumers who filed complaints with the Consumer Protection Division. Another judge found O'Dell in contempt of court on two occasions for refusing to appear at hearings ordered by the Court in the matter, and O'Dell served a total of 40 days in jail. Finally, in February, a third judge ordered O'Dell to pay $10,000 for fees and costs of the investigation.

Judge Rosenberg also prohibited O'Dell from accepting any payments for labor until the labor is performed. Rosenberg ordered O'Dell to have customers make any payments for materials directly to the material supplier, and he ordered O'Dell to comply with the Iowa Door-to-Door Sales Act and follow specific procedures in all future business transactions. Rosenberg also assessed an additional $40,000 in civil penalties - but he said O'Dell would not be required to pay the penalties to the State so long as he complies with all other terms of the Court judgment. The Wapello County Sheriff's Department assisted in the Consumer Protection Division investigation.

The O'Dell case is part of a larger effort by the Attorney General's Consumer Protection Division against home repair fraud that includes education and work with local law enforcement agencies in addition to enforcement. The Division's enforcement efforts focus on complaints of outright home repair fraud. Consumers and contractors also sometimes have disputes about workmanship or other issues that need to be resolved privately under their contracts or in court if necessary. Such disputes often are resolved in Small Claims Court.

Miller said the most common home repair fraud complaints in Iowa involve a very few local contractors who take money in advance and fail to do the work, sometimes leaving many victims. He also said springtime usually brings a few vicious scams run by out-of-state traveling con-artists. He said such "fly-by-night" perpetrators typically knock on people's doors and offer to do a job at a bargain price, usually saying they have material leftover from another job, such as paint or asphalt for driveways. The con-artists take people's money and do little or no work - and sometimes bully and intimidate older victims into paying huge sums. Victims should call the police or sheriff immediately to report such schemes in their area, and should call their bank at once to stop payment if they've written a check.

Miller encouraged Iowans to contact the Consumer Protection Division to file a complaint or obtain a Consumer Advisory bulletin, "Prevent Home Repair Scams and Disputes." The phone number is 515-281-5926, and the web site is www.IowaAttorneyGeneral.org. (Click on "consumer protection information.")

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