Consumer Alert "Storm Chases"

Arkansasreports.com
Wednesday, April 24, 2013

File Photo by Arkansasreports.com 

A new law targets scam artists. 

Scam artists attempt to take advantage of storm

victims by going door-to-door to offer repair or debris-removals services, typically
offering inexpensive prices or other terms designed to entice homeowners to agree
right away. But often the scammers demand money up front, sometimes taking a
homeowner's insurance claim payment, and then do not complete the promised work.
In response to repeated consumer concerns over these types of scams, Attorney
General Dustin McDaniel helped draft a bill to combat the fraud. The
consumer-protection measure was a part of the Attorney General’s legislative agenda,
and it passed the General Assembly overwhelmingly. It was signed into law as Act
1360 last week.

McDaniel issued this consumer alert today to inform Arkansans about the safeguards
afforded to homeowners by Act 1360. The act allows consumers to cancel a home repair
contract funded by an insurance claim if the insurance company denies all or part of
a claim that would have paid for the repair.
“Scam artists that rush into neighborhoods to take advantage of storm victims would
tarnish the good names of legitimate, trustworthy contractors. We will work to stop
these types of actions,” McDaniel said. “Act 1360 enhances my office’s ability to
pursue unscrupulous contractors who will eagerly take a homeowner’s money, but
provide nothing in return.”
The Attorney General has authority to bring a consumer-protection lawsuit under the
state’s Deceptive Trade Practices Act against “storm chasers” who violate provisions
of the new law.
Storm-chasing scammers often promise to repair storm damage using expected insurance
proceeds. In some cases where the insurance claim was paid, scammers have absconded
with money without completing the repairs. In some cases where the insurance claim
was denied, the scammers attempted to charge exorbitant fees to cancel the repair
contract. The new law, sponsored by Rep. Hank Wilkins IV of Pine Bluff, allows for
cancellation of such a contract without a penalty if insurance denies payment. The
act works in conjunction with the Arkansas Home Solicitation Sales Act, which
provides homeowners the right to cancel most door-to-door sales contracts within
three days of signing the agreement. Legitimate contractors may still receive a reasonable payment for emergency repair work, even if part of a claim is denied. Under Act 1360, McDaniel can seek restitution on behalf of victims, civil penalties and an injunction to prevent the con artist from engaging in additional illegal behavior.

 The Attorney General’s Office in the past few years has pursued several lawsuits
against storm chasers who have taken money and failed to complete a repair project.
In some instances, consumers have not been made aware of the price of a contract.
Others are duped into thinking they have received a free estimate on a new roof,
when actually the contract calls for the scam artist to be the exclusive roofing
provider. McDaniel urged consumers never to pay for the entire cost of a repair in advance,
and always make sure the terms of any contract are in writing. Contracts should
indicate the exact type of work to be completed, any warranties or guarantees, and
the costs involved.

For more information about protections against storm chasers, as well as other
consumer issues, visit www.GotYourBackArkansas.org
(http://e2.ma/click/m0l0d/ydw67e/ui9gjb), or contact the Attorney General’s Consumer
Protection Division at (800) 482-8982.

Source Arkansas Attorney Generals office

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