Contractor Defrauds Wisconsin Homeowners

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[00:00:00] Bob: This week on The Perfect Scam.

[00:00:03] Royce: I mean he, he put it together pretty good with the timing of COVID and the way materials and, and the supply chain was going, you know. You hear it all day on the news, like, "Oh supply chains, supply chains." So everybody already has that seed planted in their head that everything's going to take time. Well, you already know it's going to take time, and then he shows up 14 weeks later with the wrong stuff, you already know it's going to be another 14 weeks. To drop it off to make it look like an effort, you, you start, you know, it hits you, it hits your feelings like, "Oh, man, this guy's having a rough time too," when it turns out he wasn't a rough time, he was living the time of his life just taking everybody's money.

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[00:00:40] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan. When a disaster happens like a flood, a hurricane or a fire, victims often find themselves in desperate need of home repair help. And that's often when criminals swoop in. False promises, missed deadlines, even outright theft are nothing new in the construction industry, but the number of consumers complaining to federal authorities about home repair scams has dramatically increased in recent years. For example, believe it or not, home repair complaints are as common as complaints about telemarketing in the State of Wisconsin, and that's where our story begins today.

[00:01:23] Royce: My name is Royce Babcock. I live in Wisconsin Dells, Wisconsin.

[00:01:27] Bob: And what do you do, Royce?

[00:01:29] Royce Babcock: I am a HVAC Journeyman for casinos here in Wisconsin.

[00:01:33] Bob: And just for people who don't know, what does it mean that you work on HVAC systems?

[00:01:37] Royce Babcock: They say I'm the guy that keeps everything body hot and cold, so I don't get to enjoy the nice weather, I just get to make the nice weather is what I always tell the people.

[00:01:44] Bob: And how long have you done that?

[00:01:47] Royce Babcock: Uh just over two decades.

[00:01:49] Bob: That's a long, you've been doing this a long time.

[00:01:51] Royce Babcock: I've been doing this since I was a teenager here pretty much.

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[00:01:55] Bob: Royce and his team are called in whenever there's a big failure. When the AC goes down on a very hot summer day, for example, there's a lot of pressure. The casino loses money for every minute the building is uncomfortable. So Royce has to ride into the rescue, but he and his family needed rescuing back in 2020 when a terrible fire consumed his home. He and his wife and their children got out, but...

[00:02:24] Bob: It sounds like your home was destroyed, right, completely?

[00:02:27] Royce Babcock: Yeah, it was a total loss.

[00:02:29] Bob: So...

[00:02:30] Royce Babcock: So we ended up having a total loss, yes.

[00:02:31] Bob: So where, where did you live after that?

[00:02:34] Royce Babcock: Hah, where didn't I live? We live in my parents’ house, but you know it's pretty hard with three kids you know and work and it was just, it was nonstop stress. So dealing with the insurance and where I'm living. So we did my parents’ house, and then we did my mother-in-law's house way up, it's like an hour and a half north for, in Nekoosa. We lived up there for a bit because we were in the pandemic. So everybody was laid off.

[00:02:57] Bob: Yeah.

[00:02:59] Bob: Royce leans on his parents and his in-laws for a while, but house hunting from so far away is frustrating. You probably remember that it seemed like everyone was moving during the first year of the pandemic.

[00:03:13] Royce Babcock: Well, during that time everybody and their brothers were buying a house. Like the market was insane. And the, the housing market was... it was a sellers' market, basically, you know. So we couldn't get a house. Every time we looked at one, by the time we were driving to look at the house, it was already sold.

[00:03:30] Bob: It's been months now, it's fall of 2020, and Royce decides he's only got one logical alternative.

[00:03:37] Royce Babcock: It was basically, it was bidding war that every place we looked at, so I wasn't willing to just throw all my money into something that just got us by. So I went into it, well we're going to have to build. And I've been in the trades for, you know, two decades. My dad built his house. I figured eh, it's can't be that hard.

[00:03:53] Bob: It doesn't make sense to live so far away during the construction project, so at this point, Royce makes the difficult choice to move the family back onto his original property into their detached garage which wasn't damaged too badly by the blaze.

[00:04:09] Royce Babcock: And so I redid the garage. I put some AC in it, at least, for the summertime but wintertime I didn't have heat. And so basically, we made it. We lived in our garage the whole time while we're waiting for this house to get built and everything was going fairly well...

[00:04:25] Bob: Royce even dreams about being done with the project, at least enough to move back in by wintertime, but then he hits a big snafu.

[00:04:35] Royce Babcock: I hired a, a constructor to, a construction company to frame it up and all this stuff. But nobody would give me windows. And I was just like, this is crazy. I could not get windows. I called every window company in the state of Wisconsin and they would say, "Well, if your house isn't framed, we're not going to sell you a window," because windows were going like crazy because everybody was building. That meant everybody had money, I guess. So everybody was at least 14 weeks behind. So I was like, "Well, if I get my windows in line, and the house gets framed," and, and we started, we broke ground on October 1st, 2020. So I figured if I get the windows ordered, at least by Christmas, we'll be lucky enough, you know, to get the house dried in.

[00:05:19] Bob: Dried in. Not finished, but at least sealed with a roof and windows, et cetera, enough to be a shelter anyway. But he can't find a contractor who can deliver the windows. So Royce turns to an internet search engine and just starts reaching out to the companies that are listed.

[00:05:37] Royce Babcock: So I called the first two, obviously, and they both told me to kick rock, and that's when I found on Google, they labeled Tyler Hansen's company, EcoView, they put him third on the list for like, "Oh, this guy is amazing."

[00:05:53] Bob: Royce calls EcoView and Tyler Hansen responds right away. He immediately offers to come out to the construction site.

[00:06:01] Royce Babcock: So he shows up at my house, probably like it was a weekend in October. Comes over, hangs out in the garage with me and my wife, tells us all the great things he can do and showing us pictures. I mean, like probably like 6'1, 6'2 at the time, like maybe 190, 200 lbs. He definitely looks like he was in the trades. Like he ain't afraid to get dirty. But, yeah, he's clean cut, very professional. He was a kind of a godsend because I was literally in a very, very serious bind of not having a place to live.

[00:06:31] Bob: Hansen tells Royce he's astonished the other companies told him he'd have to wait several months or longer. He can have the windows to Royce within a few days.

[00:06:43] Royce Babcock: And at the time, I was, you know I was more relieved that somebody was actually going to try to help me because everywhere, every avenue I was going...

[00:06:49] Bob: Nobody else would even answer the phone. Like yeah, yeah.

[00:06:52] Royce Babcock: Exactly.

[00:06:53] Bob: So Royce puts down a downpayment and places a very big order with EcoView. Thirty-two windows and five sliding glass doors. And the windows do arrive ... sort of. The windows aren't the brand Hansen promised, but without better options, Royce installs them anyway. At least the windows that are the right size. Still about a quarter of the home is windowless because some of the windows are the wrong size. And when Hansen tries to fix the mistakes, well, that doesn't work out too well either.

[00:07:26] Royce Babcock: He, he showed up with a U-Haul to drop these windows off. And I was like, that's when I was like, "This ain't good." [laughs] Like this could be, this could be bad, but I'm, you know, I'm taking everything I can. I'm getting... work progress is being made so we were still on the good side of things.

[00:07:41] Bob: It's winter now. In fact, the entire winter passes while Royce tries to get the remaining windows installed in his home. Remember, they're all still living in the garage. And right about then, in April 2021, Hansen has another proposition for Royce.

[00:08:00] Royce Babcock: He's like, "Well I can do your siding," 'cause I was like, ah, I really don't want to do my siding." And he goes, "Oh, I can do that. I'll send you my, my, my sales guy over here."

[00:08:09] Bob: The salesman says he can put up the siding for about $20,000 and asks for 50% upfront. And after Royce gives him that money, things take a quick turn for the worse.

[00:08:22] Royce Babcock: So that's when I gave him 10 grand upfront. And then it was nothing but COVID excuses; his mother died, his father died, everybody died. I've... this guy, I've... when I went through all the messages last night, this guy... I mean he should have nobody left in his family. I mean everybody died. It's insane. This guy used that excuse so much, it was insane. So that's when I was like, something ain't right.

[00:08:48] Bob: Royce tries and tries to get in touch with Hansen, and nothing.

[00:08:56] Royce Babcock: I sat there just waited and waited and messaged, and then he gave me a different phone number that Mr. Hansen was getting ahold of me from. I called him, I emailed him. He had people literally, they said that they worked for him, just called me up. They gave me some excuse at the time, like oh, he had a brain injury this weekend. And it's like, what?!? Like how can this guy have that bad luck. I'm like only I have this luck, you know. (laugh) So...

[00:09:22] Bob: Do you remember the day that you were really sure, no, this is bad?

[00:09:27] Royce Babcock: Uh, I signed the siding contract in April of '21, because that was when we were, we still had windows and he had the good excuses of why they weren't working. And oh yeah, you know all these promises, "this will get fixed," "we've got this," you know I was, like I said, I was seeing progress so I was like, "Okay, I'm going to give you some slack and yeah, if everybody died in your family and you get COVID every day, I get that." So I was pretty lenient on my end because, you know, this guy did save me in the beginning. So I was a little, okay... I signed the contract April something of '21 for my siding, and that's when he just took that money, and then it was nonstop excuses. It was like, "We don't care about your windows. We don't care about anything." He gave me silent treatment to the point where I mean I was, I was literally driving almost to his house. Like, what is going on dude? Why are you, you know why do you do this? Like why do you sit there and give all this hope, and then you just leave me in the dark? But what really triggered that something was wrong, it was about, I want to say late fall of 2021, he sends me a message and he goes, "Oh, you do heating and air, right?" I said, "Yep." He goes, "I got a house in Wisconsin Dells, if you can do a couple runs for me," he goes, "I can afford your siding." And then I said, "What do you mean afford my siding? You supposedly, I'm waiting for it to be delivered." And that's when he knew he slipped up. And that's when I was like, okay, I've got to do something about this. This guy is showing way too many signs that, that he ain't coming back.

[00:11:01] Bob: He ain't coming back. It's now been almost a year since he first found EcoView on Google. Almost a year and a half since the fire. And Royce is about to find out that he's not the only one living with holes in the side of his house thanks to Mr. Tyler Hansen.

[00:11:20] Royce Babcock: Well then, I magically look on Google, and he's got all these negative reviews. He didn't have them when I looked at it back in 2020. He was the greatest thing. And I was like, "What did I get involved with?" And I researched him, him some more and I find out he had like a, a, a nursing home that he was you know stealing drugs from the, the patients back in 2014. And I was like, uh-oh. Now we-, now we're into something that this, this could be getting real, real bad I was thinking. So I did some research. I called the Better Business Bureau of Wisconsin. They just said, "Yeah, file a complaint." And that's all, it ended with that. So I get a hold of DATCP with is Department of Agriculture Trade and Consumer Protection, and I talked to this guy named Howard, and he's telling me, "Oh, I've been after this guy for years." And I was like, "What did I get into?" And he's like, "Yeah," he's like, "this guy has, I've got his pull for 13th LLCs."

[00:12:13] Bob: Tyler Hansen has used names like Weathersealed Wisconsin, Midwest Outdoor Living, Windows Unlimited, and of course, EcoView, among others. So, he could escape the trial of complaints he'd left behind. The more Royce reads, the more fraud he finds, and he starts to find a trail of civil lawsuits, but Royce doesn't want to sue Hansen. Hansen made his family live in a garage for almost a year. He wants this serial liar to go to jail.

[00:12:46] Royce Babcock: It was a, quite the debacle, but once, once I, once I threatened law on him, and I noticed that everybody was filing civil lawsuits, I was like, well I'm not going to do civil with this guy because you're not going to blood out of a turnip, so I was like, we have to do criminal. So then I get a hold of the county policy, and they were at first were like, "Yeah, just take it to civil." I was like, "No, this is not a civil case. Like this guy is literally, I think he's doing it for a career." So after I pretty much begged the county, which is Columbia County at the time, uh, he... they sent me a detective. His name was Detective Brian Johnson. The guy was, basically if it wasn't for him, I don't think any of this would have happened. Because once he came over to my house and I gave him a foot stack of information of everything I researched, I mean, it was insane. I had his birthdates, I had the places he's lived, I had everything lined up for him, and I explained to the detective, like "If I have a subpoena of his bank records, I can prove where my money went." So he was like looking at it. "Okay. I'll look it over." So he takes it, and like two months go by. And I would get a hold of him, I'm like, "What is going on?" And he was like, "I was just going to call you," he said. He's like, "We just opened up Pandora's Box." And I was like, "Well, I don't know what you mean by that." He's like... he said, "Once we got the subpoena of the bank records," he's like, "basically, it showed years and years of fraudulent everything." He's like, "You are just the tip of the sword." He's like, "You, you got this thing rolling," he said, "that's great," he's like, "but this is not an easy case." He's like, "We have so much involved now."

[00:14:21] Bob: In fact, the trail of fraud that follows Hansen around is so long that federal authorities become interested in the case.

[00:14:29] Royce Babcock: So that was in '22. Probably about May of '22 is when I talked to the detectives finally, and then it was about Thanksgiving of '22 again, he calls me back and he was like, "We have so much involved," he goes, "and now the FBI is getting involved."

[00:14:47] Bob: Federal and local investigators find out that Hansen would manage to string clients along through cleverly crafted smoke and mirror games.

[00:14:57] Royce Babcock: He was basically he had material inside of a truck that he would go around and I talked to other victims, and I'm willing to bet the same material he dropped off at my house, which was obviously the wrong material, it was like a lime green, which was nothing even close to what we ordered, and he's like, "Oh, no. I have to wait another 14 weeks to get that." So then he just comes and picks it up, and he takes it to another victim and drops it off and they say the same thing. Like, "Hey, this is the wrong stuff." "Oh, I'm sorry. I got to do another 14 weeks then." I mean he, he put it together pretty good with the timing of COVID and the way materials and, and the supply chain was going, you know. You hear it all day on the news, like, "Oh supply chains, supply chains." So everybody already has that seed planted in their head that everything's going to take time. Well, you already know it's going to take time, and then he shows up 14 weeks later with the wrong stuff, you already know it's going to be another 14 weeks. So it's pretty smart what he was doing, you know? I mean to, to take material that obviously no... everybody knows it doesn't go on their house, but to drop it off to make it look like an effort, you, you start, you know, it hits you, it hits your feelings like, "Oh, man, this guy's having a rough time too," when it turns out he wasn't a rough time, he was living the time of his life just taking everybody's money.

[00:16:07] Bob: Living the time of his life taking everybody's money until Hansen is finally indicted in August of 2023. Federal authorities say he was taking customers' deposits like Royce's $10,000, and simply spending the money on himself.

[00:16:25] Royce Babcock: He just kept going getting more deposits, that's all he was doing. He was just collecting more money, 'cause he was actually, supposedly giving out refunds. But I haven't met anybody that got a refund yet.

[00:16:36] Bob: While federal authorities build their case, Royce talks to a local journalist who tells his story on TV and what seems like an avalanche of victims get in touch with him.

[00:16:47] Royce Babcock: So that's why when I started helping other people, like Janet, like okay, "What do you got?" And then we, I send it to my detective, like "Hey, this is the same county. Put this lady on the list." I met a lot of victims that dealt with Mr. Hansen late '21, early '22, way after I was already involved with them, and I, I'm like, "Ah, I wish I would have met you a year ago because I would have told you to run." You know, he got a lady down the road from me, like I said, he wanted me to do this HVAC work for her. Well it turns out I actually do know her. She works at the casino here. He came and basically ripped the side of her house off and left. You can see the inside from the outside for two years also.

[00:17:27] Bob: And this is why we're telling you this story today on The Perfect Scam. Of course it's terrible when a criminal takes your money and doesn't do what they say they'll do. But with home repair scams, money is often the least of the victims' worries. These crimes often leave people without a safe, warm, dry home to live in. That's what makes them so awful.

[00:17:49] Bob: Help explain to someone who might not understand, why is this so devastating to people like you?

[00:17:53] Royce Babcock: Well, it's devastating for us, especially in Wisconsin, I mean we have harsh winters and pretty wet falls too. So her house was the same as my house. I have pictures where I'm sending it to Mr. Hansen, like, "Dude, I got water coming in ruining my youngest daughter's room." Like, "I just built this house and you're going to destroy it."

[00:18:11] Bob: And you're losing so much more than money. I mean this, this must just be so frustrating.

[00:18:16] Royce Babcock: Oh, I missed, ah, I didn't, we didn't have a housewarming party. I got married in July of 2020, 4th of July. We couldn't even have a place to have our own, you know, we didn't want to have a huge giant reception. We were going to have it at our land. We were going to have all these parties, the birthday parties. You know, the things that the kids missed out on because they were basically homeless, you know. So you don't want to have a kid's birthday party, which we, we, we still tried, but when your kid's friends come over, and they're like, "Oh, you live in a garage?" Like, you know, [laughs] we have to warn everybody for the longest time. Like, "Hey, if your kids want to come over and play with us, like this is our living right now so be warned, you know?" [laughs] So just the, just the mind games that he played and the stress, you know what I mean?

[00:18:59] Bob: Not long after the indictment, Hansen and his wife both plead guilty to fraud. They were sentenced just a few weeks ago, in January 2024.

[00:19:10] Bob: When was the last time you saw him?

[00:19:11] Royce Babcock: Well two weeks ago. I, I was at the federal case.

[00:19:15] Bob: Oh you were, you were at the sentencing two weeks ago.

[00:19:17] Royce Babcock: Yeah, yep. I went and spoke at the sentencing.

[00:19:20] Bob: Did he look at you?

[00:19:21] Royce Babcock: Oh he, to be honest with you, I think I was the only one he probably didn't want to look at. 'Cause after the message I read, (laughs) last night I was recapping everything we talked about, yeah, I wouldn't want to look at me either, 'cause I was pretty hot. (laughs) So but...

[00:19:35] Bob: But what did you, what did you think when you looked at him?

[00:19:39] Royce Babcock: Oh, well when I first seen him, he gained, he doubled his weight. He was sucking air. He had a limp. It was like, what happened, dude? Like it was insane. I couldn't, almost to the point you couldn't recognize him. And even one of the other victims, her name was Dawn, she even said to the judge, like, when he showed up, this guy was handsome, like he was clean-cut, you know what I mean? He knew his stuff, like he came out and said the right things, and look at him now, like now he's just getting overweight and probably having health issues in prison.

[00:20:09] Bob: Hansen is facing the prospect of 20 years in prison, and Royce thinks he deserves every minute of that. And he tells the judge this when he reads his victim impact statement during the sentencing. We asked Royce to read part of that for us.

[00:20:23] Royce Babcock: This was actually pretty tough. I mean when you're doing a victim statement, I mean the emotions. Do you know how many times I threw my keyboard typing this thing? (chuckles)

[00:20:33] Royce Babcock: "We had to purchase the siding that we already paid Tyler for, increasing the amount of the construction loan, the interest rate has tripled from what it would have been, what I originally had. Extra purchase that required, and the increase of interest costs us 275,000, an amount that would take our monthly mortgage payment to a severe strain all because of Tyler Hansen. His associates and their unsavory, unethical, illegal, and immoral business models, the stress placed upon us from the lack of principles displayed by Mr. Tyler, having to investigate and find out just how shady he is at having created this undue strain. Now dealing with the stress of wondering how we are going to complete this house with the help of friends and family, and time to appease the financial institution continues to weigh heavy." And that's putting it very politely.

[00:21:25] Bob: The judge gives Hansen 7 years, and his wife 3. That doesn't sit well with Royce.

[00:21:31] Royce Babcock: Yeah, 7 years but he already had a year and something in from hanging out in the county. And that was the main deal, which is I, I explained to the federal judge. I'm like, "I'm kind of upset with the DOJ," I said, "'cause there's still victims out there. There's still elderly people out there that don't have social media, that don't pay attention to the news, they're waiting in their hand with a contract from Tyler Hansen." So I walked out of there with a pretty sour taste in my mouth, but... what can you do?

[00:21:57] Bob: So when you total up the, the amount of money, I know it's confusing because you gave him money for windows, and he gave you the wrong windows or whatnot, um, but how much did he steal from you directly?

[00:22:08] Royce Babcock: Theoretically, directly uh, with the windows that are messed up, probably close to 30,000 altogether, but yeah, then you add the amortization of the loan and why, you know, the state of Wisconsin...

[00:22:20] Bob: Yeah, the real impact is much bigger, yeah, yeah.

[00:22:21] Royce Babcock: Yeah.

[00:22:23] Bob: So what is Royce's living situation now?

[00:22:26] Royce Babcock: Well, I ended up firing everybody, because once the trust was broke, I was like, I'm done with everybody. I finished the house myself. I found a couple good friends, which one of them was like a siding expert up in Minnesota who I met after I already met Tyler Hansen. So as of right now, my house is almost done. I can't aff-, I can't afford the deck, but the house is down, no deck, and we are just, I'm working 8 days a week. I started my own business doing basically remodeling, uh heating and air to help me, and that's what's been getting us by. So I work 8 days a week, and I just throw money at the bank every day of my life. That's what I do now. For the next 30 years, that's what I'll be doing. 'Cause he ended up charg--, by him pulling his stunts, it ended up charging, costing me $275,000 over the, the 30-year loan.

[00:23:16] Bob: God. That's just a nightmare. But at least there's, there's no more leaks in the house, like if the house is comfortable and warm and so on.

[00:23:23] Royce Babcock: Yeah.

[00:23:24] Bob: Which is good because...

[00:23:27] Royce Babcock: We ended up having a newborn. She's 6 months old.

[00:23:30] Bob: Congratulations.

[00:23:31] Bob: What would Royce like people to know about all that's happened to him?

[00:23:35] Royce Babcock: You know what I learned over all of this and like, and over the last three and a half, four years here, like I've had so many people contact me about different companies. They're like, "What do you think about this?" I mean vet your companies. But then I, if you look up actually the, the cases that he, you know, that I vetted him, I looked up his cases; this guy was doing criminal stuff way before he even met me. So the main thing is vet the guy. You know, I mean look for reputable companies that, that you know. And always ask for references. Always ask for references. And he was sending me references, which I, at the point like I said, I was so stressed out, I was in so much chaos with the family and no house and all that stuff, I didn't even care. I was like, whatever. Google said you're good, we're going with you, and you help me out." Well, you know hindsight, I was kind of, you know, not really watching my own back at the same time, but I was more worried about getting the kids in a house than I was about if this guy's really going to rip me off or not, because he doesn't seem like it.

[00:24:32] Bob: I would like to just stress one thing that I think you said that's really important which is, you know although people think a quick Google search is enough to vet a company, and it's not.

[00:24:41] Royce Babcock: It's not even close.

[00:24:43] Bob: So how can you protect yourself from home repair or home improvement scams? It's not easy, especially if you, like Royce, find yourself in a pretty desperate situation. But for help with that, we talked with Joannie Wei, an Assistant Director at the Federal Trade Commission's Midwest Office.

[00:25:04] Bob: It is one thing to have money stolen from you, um but it's another thing to have a hole in the side of your house while you're waiting for someone to show up, right?

[00:25:14] Joannie Wei: Yes, a hundred percent. This and other scams that involve someone's home are particularly troubling because of the reason you mentioned, this is your home. And typically there's some issue. It, it's typically not a remodeling scam. Typically these home improvement scams we see are people who desperately need work done on their homes for some specific reason, like the roof is leaking, the foundation, there's a problem with the foundation, there's an issue, with pipe-, pipes, electrici--, elect--, you know, electrical wiring. It's, it's typically people who really need the help and need it right away. A lot of time we see...

[00:25:51] Bob: It's after a storm or in this case it was after this guy's house burned down, right? So they're, they're desperate, and that's why they're vulnerable.

[00:25:57] Joannie Wei: Yes. Absolutely. Uh, we see this a lot. This is one of these hallmarks of home improvement scams, a flood, a windstorm, hail, you know ice on the roof, some kind of disaster, and then the scammers come out of the woodwork and prey on those specific people who've just been, you know, who've just been impacted by a horrible, some type of natural disaster.

[00:26:19] Bob: Just how common are home repair scams? Probably more common than you'd think.

[00:26:26] Joannie Wei: Yeah, I, so the FTC keeps this database of reports that we get from consumers across the country about fraud or other nonfraud issues as well. In 2022, which I have the numbers for the full years, the FTC received 82,482 reports from people about home repair/improvement issues. Now, and in 2021, it was even higher. It was close to 90,000, that might have been related to pandemic, a, a spike pandemic-related scams. But the thing about that number, first of all, that's a really high number, but this is most definitely the tip of the iceberg. It was the top because the vast majority of people who have an issue don't report it to anybody. They, for whatever reasons, and so we know that 82,000 means many, many more people suffer from this issue.

[00:27:25] Bob: So 82,000 is just a number. Imagine behind every one of those complaints is someone like Royce living in terrible conditions, waiting for help.

[00:27:38] Bob: But is 82,000 a lot?

[00:27:40] Joannie Wei: Here's the stop three issues in Wisconsin in 2022: landlord and tenant issues, telemarketing fraud, and then home improvement. So it's really crazy.

[00:27:52] Bob: There is as many complaints about telemarketing as there is home improvement.

[00:27:56] Joannie Wei: Yeah.

[00:27:57] Bob: That is a shocker to me.

[00:27:57] Joannie Wei: Slightly less, slightly less. Maybe like 400 fewer complaints, but it's really crazy that home improvement is so high up on the list.

[00:28:05] Bob: It's at that scale, yeah, it's remarkable. I mean, yeah, just especially I mean because everyone has a phone, right, but not everybody asks for home improvements.

[00:28:13] Joannie Wei: Right, and telemarketing is so, I mean, everybody is harassed by these robocalls and (giggles) phishing, spoofing, imposter scams and on--, through the phone, texting. So yeah, the fact that home improvement is just, just under that is pretty um, startling. Yeah.

[00:28:29] Bob: That's remarkable.

[00:28:31] Bob: It's important to realize that criminals like Tyler Hansen are highly skilled. He knew his way around home construction. He even knew enough to show up at people's homes with fake construction materials.

[00:28:44] Joannie Wei: You see somebody who's making promises that seem really great at the time and you want to believe them because you're in desperate need of this help. And scammers, I just want to add that scammers are very, they are professionals. They are very polished. They know what to say. They've done this for a long time. They know how to prey upon people, what they want, what they need. And what I like to tell people is you're not, being targeted by a scammer like this has nothing to do with you, and everything to do with them and their conduct. People, people who have experienced this type of scam, they are not alone. And like I said, it has nothing to with something you did wrong or you didn't understand what they do. It's nothing to be ashamed of.

[00:29:29] Bob: It's easy to tell people they should read contracts carefully before they agree to deal with any construction company, but again, most people in this situation are in some kind of dire straits. So what does Joannie recommend to them?

[00:29:44] Joannie Wei: Yeah, I, I think that the first thing I would say is I, I know that it's, it's an emergency situation and people are desperate and this is the case across all types of scams, not just home improvement scams, but it, it's, it's typically an urgent situation. There's always this pressure in the immediacy of the moment and that's, like I said, common with home improvement, but it's also common in all sorts of scams. Scammers want you to act fast and they, because they don't want you to stop and think. That's part of it. That's like the most effective technique they have. So I would say the first thing I would advise people, this is, it's, this is, this is, again, across all types of scams, is to be able to pause and recognize red flags. And the first one is always this pressure to act quickly. The second one is payment, payment method, because one thing to remember is scammers can't really succeed in their scam unless they get paid. So there's always this urgency to pay either in cash or upfront, and that's something always just to raise, that should help people raise, uh that should raise a red flag for people. But this is, this, and then the other thing is stop, check it out, don't make an immediate decision, and what I mean by that, it doesn't mean you have to wait three days and check out five other contractors, but just pause, even if it's just for a moment, and call one or two people you trust and just talk about this potential contractor, this opportunity, what you're about to do, because this is a big investment of money and time and this is your house. So the pause and check it out advice applies to these types of scams, but all scams. Usually if people pause and call maybe one person to talk about it, they can avoid the scam, because like I said, there's this pressure to act quickly. This person's busy. He tells you he's got a lot of other customers waiting. He needs a decision right away. Never be afraid to pause and stop. The other thing is, I know that when your house, you have a hole in your roof, you want to, you want to go, you really want to get somebody signed up fast, but I think the thing I'd like to really emphasize is, it doesn't take that long to check it out.

[00:32:01] Bob: What does Joannie mean by check it out?

[00:32:05] Joannie Wei: So the first thing you can do is just, I do this all the time, a quick Google, just a Google search of a name, a name of a company, a phone number, an address, along with the words scam, review, complaint. You'd be shocked by how many things pop up online, and that can, that takes seconds, and that could, that could inform you immediately that you should maybe take a closer look or pause. Figuring out if someone is licensed or insured, like a contractor's licensed is insured, is something that takes a little bit more time, but we tell everybody to do. Again, with the internet now, with the ease of access to our state and county government websites, it is actually something that you can do fairly quickly. And this person, if it's a legit contractor or home improvement specialist, will, can wait for you to do that. Yeah, and the contract, reading the contract carefully, you know, contractual, contractual requirements vary by state, so some states, you know, don't, might not require a written agreement, but I always tell consumers ask for one, that again shouldn't delay if this is a legit contractor, and they really want to help you with your project, asking for a contract is not going to delay, is not going to prevent this contractor to work with you if it's a legitimate contractor. And what I say about contractors is here are some more red, contracts, written contracts, some more red flags. If they rush you, if someone is rushing you to sign a contract, if there are any blank spaces on the contract, if the contract is in a language you don't understand. We often have Spanish speaking consumers tell us they were forced to sign a contract in English. Those red flags, again, you need to pause, and, and don't let ever let anyone pressure you into signing a contract. Do not ever transfer your deed into your property to anyone without consulting an attorney. And then the other red flag is loans. A lot of sketchy contractors will tell you they can help you with financing. They will help you; they know a lender, they can help you access the money so we can get the job done really quickly, major red flags there. And so I think the thing, yeah, so my main advice to people is just don't rush it. I know it feels really urgent, but the consequences can be so dire that it's definitely worth even a day, you can do a lot in one day to check out and prevent yourself from being victimized by these, these scammers.

[00:34:50] Bob: I think that's all great advice, and I, I, I completely a--, agree that so much pain and strife would be avoided if people just took a second to google the name of a company and complaint or something like that online. Things do pop up, but in this case, Royce tells us that he did google the company, and there were lots of positive, perhaps fake, reviews of, of this company. And so, I also think it's important to stress that while that's one angle, you can't necessarily believe what happens when you search things online, right?

[00:35:24] Joannie Wei: Yes, that is such a great point. 100%, and more and more now as fake reviews are rampant on-, online. You have to read reviews with a critical eye. So, some red flags, when it comes to positive reviews, is a high number of five-star reviews. And this is subjective, but if you review a bunch of reviews and they're all glowing and really positive, you may notice certain trends or certain buzzwords that are repeated in a lot of reviews. So, you are absolutely right that that type of online review can definitely be fake. The Better Business Bureau is a great resource. A lot of, I think the, the reviews on the Better Business websites are vetted and often more trustworthy. And another thing about the Better Business Bureau is they actually do list the number of complaints that a company has with a little bit of detail and how the company has resolved them and in addition, in addition to some details about the category that the complaint falls in, you know, work wasn't done, or work was half done, or work was done in a shoddy way, or financing issues. And so that can also be really helpful, and the BBB websites are really easy to navigate and quick to search as well. The other thing I do, this is a personal thing I do too when it comes to contractors, is I look in my local sort of social media listservs. In my town we have listservs where people recommend contractors and a lot of homeowners will share information through social media. That's another avenue just to get another source of information about the contractor.

[00:37:09] Bob: But one thing that's tricky about contractors, I think, is you know it's a tough business, and the truth is, a lot of people are unhappy with their contractors who are legitimate and delays are legitimate, right? And so I feel like it's a, it's kind of a gray area, um, like it's kind of hard to figure out what's standard contractor missed deadlines and what's a scam, right?

[00:37:37] Joannie Wei: Yeah, that is a really good point. There's the, there's the 100% fraud, right, the scammers. They take their money and go, they do nothing. There's, there are those folks that operate somewhat in the gray area in between. And then there's the legitimate contractors that are just incredibly delayed and frustrating. And we've all probably experienced those types of contractors who are not out to scam you, but the work just isn't great or their communication is terrible. And so there's a lot of different ways, so if you're on, on one end of the spectrum, the, the really horrible scam side of it, those are in--, incredibly challenging and it's hard to, there are, their, your recourse, if you've already paid, it, it can be tough, particularly if you've paid cash. If you are more on the other side of the spectrum, where it's just sort of a shoddy, or just a poor customer service, I would say, the FTC does have on its website, sample letters that you can write to a contractor, and it's a template that we hope people can take and use, but essentially helps you sort of spell out your story in a compelling way to try to convince the contractor to get on the ball. And with both legitimate and illegitimate contractors, it's just like scammy contractors and legitimate contractors, I would say contacting your state Attorney General or state Consumer Protection Office is never a bad idea. For those contractors that are just not doing good work or just delaying, but that these government, these local government agencies could help you mediate complaints and sometimes it just requires a firmly stated letter and a complaint to your Attorney General's office to get that contractor to get to work and focus on your project. So it doesn't always um involve something major like a lawsuit or initiating arbitration or mediation. One thing I’d add though, and this is important, is not to pay all the money upfront for a job. And that's really important because the 100% scam outfits will ask you for that money upfront or a significant chunk of the money upfront, and they will typically ask you for it in cash or money transfer, some type of way that's the equivalent of cash, and, and that's a, a red flag. A credit card is a great way to pay. I always tell people if you can do that because the fraud protections for credit card payments are much more robust.

[00:40:10] Bob: Even if there's a fee, in this case, you know everyone wants to avoid these credit card transaction fees, but in something this important, I think it's probably worth paying, uh you know 2 or 3% penalty use, for using your credit card, just so you, you have the extra protection. What do you think?

[00:40:23] Joannie Wei: Absolutely. Absolutely for something like this, absolutely. The other thing is, for huge projects like this, when you're paying a significant amount of money and your house is involved, keep records. It's like, um, the story that you, about Royce's experience about keeping his records -- so critical. In my job, we run across so many issues and when we find a consumer, for example, like Royce who's kept great records, it's like, it's like hitting the jackpot. These are, these consumer stories are so helpful to us in putting together our law enforcement cases, identifying the companies that are engaged in this and how they're operating, how they're getting paid, their tactics, the, the, but it's, and it sounds like Royce's record keeping and his experience was tremendously helpful for the Attorney General's office in Wisconsin.

[00:41:18] Bob: It, it sure was. You know and in this case, somebody actually went to jail, which um, doesn’t happen very often, so I think that's um, you know, there's some justice served there. Um, but one, I think, important question, it is reasonable to have a builder require some kind of upfront payment; they've got to go buy some materials. In this case, Royce was asked for 50%. Roughly, what do you think is a reasonable amount to pay upfront?

[00:41:44] Joannie Wei: I don't think I have the expertise to comment on what's reasonable. 50%, just that figure, I don't know that I could say that that, that should, that is always a red flag too high or, or not. I think that what's important is that the payment schedule is laid out in the contract, and you can look at it and review it and make a decision not a a, an unrushed decision about whether that's reasonable. I guess it depends on the cost of the materials, the upfront cost of the materials, and what needs to be kind of the investment of the contractor in the job. But I think that a legitimate contractor will be extremely upfront and lay that out for you in a contract.

[00:42:28] Bob: So where is the best place to look to, at least to be sure the company you're working with is licensed to do the work?

[00:42:36] Joannie Wei: The starting place for all, most states, I would say, is the Consumer Protection Agency. So that typically is under a web of the Attorney General's office. So in some states like Wisconsin, for example, it's not the Wisconsin Attorney General or, or Department of Justice. It's not the Wisconsin Department of Justice, it's the Wisconsin Department of, it's Agriculture, Trade, and Consumer Protection. But typically that information can be found by looking at the state's Attorney General website and look for Consumer Protection and you'll be directed there. And I think typically from that state or county government website, you can confirm a contractor's license. Home improvement scams are so common now, they're typically highlighted in a specific, on a specific webpage or in a specific link from the, from the state government websites, and it shouldn't be hard to find because this is a huge problem, and consumers need a lot of resources. There are so many tips and resources when it comes to this type of scam.

[00:43:38] Bob: And if you are a victim of a home improvement scam, it's incredibly important that you report it. Without all those complaints, Tyler Hansen wouldn't be in prison today. He might still be out there taking deposits from vulnerable victims.

[00:43:52] Joannie Wei: People who have been targeted and impacted by this kind of fraud, should not be embarrassed or ashamed. There's an attorney that I work with, a Consumer Protection attorney, for over a decade, and he was targeted and lost thousands of dollars to a moving scam, a mover, a moving company that was going to move him across the country. It happens to everyone. And so the most, so I really want to emphasize how important it is for people to report a fraud to the FTC or to their state agencies. And I think that Royce's story is such a great example of how reporting it does make a difference. And sometimes it feels like as a consumer, oh, I don't have the time to report this and it's just going to go in a black box and nobody will be able to help me, but what I want to try to tell people is that Consumer Protection investigators and attorneys, we do scour this database where complaints are filed. We do share information with our local partners. We do look for trends and these scammers cannot, should not be able to get away with it. And I just, I really do want to encourage people to file complaints, whether it's with the BBB, your state, or the FTC. Uh it's so important to do that. Even if you didn't lose money, but you almost did and you, there was a scam, there was a contractor that was sketchy. Your complaint could save another person from being scammed. I think that's the main message. Oh, the other, the other message I want to highlight is that resources are available online. And, and if you look for them, and it's so easy to find them. I want to highlight the, the FTC has a lot of very well done, we spend a lot of money researching the best and most effective way to get messages across to consumers. Nobody wants a flyer with full of information, you know, that you have to cull through. That's not useful. We design a lot of our materials to be, tell you only what you need to know. Not what we want to tell you, but what you need to know in plain language, easy to understand. And I just, I encourage consumers to check that out, and then to the extent there are community leaders, leaders who work, work with older adults or others, I encourage you to check out the resources and then pass them on to your communities because that makes a huge difference. It's so much better to prevent the scam than starting, than trying to unscramble the egg after it's happened. So education is critical. So, we look towards a lot of our partners and this podcast, for example, it's amazing. I really appreciate the opportunity to share this message to your listeners. But just the education piece is so important.

[00:46:39] Bob: It's very, very hard to unscramble the egg. That is truer words are never spoken.

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[00:46:50] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Our email address at The Perfect Scam is: theperfectscampodcast@aarp.org, and we want to hear from you. If you've been the victim of a scam or you know someone who has, and you'd like us to tell their story, write to us or just send us some feedback. That address again is: theperfectscampodcast@aarp.org. Thank you to our team of scambusters; Associate Producer, Annalea Embree; Researcher, Sarah Binney; Executive Producer, Julie Getz; and our Audio Engineer and Sound Designer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.

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