2 Investigators: How To Spot Home Repair Scams
(CBS) -- Your home is damaged by a bad storm. After the storm contractors may show up at your door soliciting you to sign up with them to fix the damage. But watch out for some of the tricks of the trade homeowners have learned the hard way.
Hours after homeowners in Huntley were hit with a bad hail storm last April, the door to door solicitations began, Michelle Kasper recalled.
"They wanted to give free estimates for siding damage and roof damage to houses that were involved in the storm area."
One of the salesmen worked for Aloha Construction of Lake Zurich. Kasper says the Aloha salesman gave a form to her and her husband saying they needed to sign it so their man could get up on the roof to see if there's any damage and talk to their insurance company.
The Kasper's say that after they decided to hire another company, Aloha billed them more than $1,273 citing paragraph #11 on the reverse side of the agreement they signed. It says homeowners have to pay 15 percent of Aloha's estimated contract price if the homeowner cancels the agreement after the company has negotiated the insurance claim. They say they had no idea that they were signing a contract and did not read the reverse side.
"I didn't know there was a reverse side," Michelle Kasper said, noting that the salesman handed the agreement over to them attached to a clip board.
The Kasper's say the same thing happened to one of their neighbors who confirmed it. "She let me know she got a bill from them for the 15 percent, over $2,200," Michelle Kasper said.
"I think they're scamming people and then using that number 11 as a scare tactic," Michelle Kasper said. "They're misrepresenting in my opinion."
Misrepresenting what? "This free estimate," Kasper said.
We went to Aloha's Lake Zurich office with some questions. An employee who identified himself as a sales manager, said the company's sales pitch is not misleading.
Later, David Farbaky, the company owner, pointed out that the front of the agreement Kasper signed explains that if Aloha negotiates an insurance claim, it gets the contract to do the work. Salesmen are supposed to read that section out loud to the homeowners, Farbaky said. The Kasper's say that did not happen.
Farbaky also said his salesmen should be calling attention to information on the back of the agreement. The 15 percent charge is to reimburse his company for the time it spend getting materials after the insurance company negotiations are complete, he explained.
The agreement is not supposed to be presented to prospective clients as an authorization
to get on the roof, Farbaky said. He said he would look into the homeowners complaints adding that if what they say is true, the salesman did not follow company procedures.
"We want to make people aware of the whole process and make it hassle free," Farbaky said. "And if that's not being done, I have a big issue with that."
"To keep the peace, because not one project is worth my reputation," Farbaky said, "I will tear up their invoice and make it seem like this never happened."
We showed the Aloha agreement to Roger Morris of the National Insurance Crime Bureau.
"Would I sign this and would I allow somebody on my roof with this document? No." Morris said, adding "You don't want to sign anything you don't know what you're signing, that you haven't reviewed carefully."
Morris says homeowners should not let anyone on the roof before their insurance adjuster assesses the damage.
A videotape of other contractors investigated by the NICB shows what can happen. On the tape you see one man on a roof creating damage by using a tool to lift up shingles so they look like they suffered wind damage. With another tool, another man is shown making dents that look like hail damage.
Before you hire a roofing contractor, the NICB also says you should make sure the company is licensed and insured, get several estimates and references and check those references out to avoid any problems on top of all the other hassles of dealing with storm damage.
"We see a lot of this," Morris said. "It's a major problem across the country."
For more information you can check out the website of the National Insurance Crime Bureau or submit a complaint form at www.nicb.org. Complaints can also be made with the Illinois Attorney General's consumer fraud hotline: 800-386-5438 or the Better Business Bureau at 312-832-0500 and at www.bbb.org.
