• More than 2,000 complaints were filed last year
• New law requires contractors to register
• Tough penalties for scamming people over 60
Sandy and Kim Kistler spotted a small advertisement for a home contractor on a place mat at a local restaurant. The couple called the number in the ad, hired the man to build a sizable addition onto their Berlinsville home, and forked over $18,000 for supplies. Four years later, they are still waiting.
“The only thing we got for our money was a trench around the outside of the house where he was allegedly going to sink the cement for the addition,” said Sandy, 55, a secretary. “And the digging of the trench broke a water main, which cost us more than $2,000 to have repaired.”
Until now, Pennsylvania had not required home contractors to be licensed. As of July 1, home contractors must register with the state so consumers can check whether someone who claims to be a home contractor really is one. More than 2,100 people lodged complaints with the state about home contracting scams last year.
‘Older people are more often than not the victim’
“Older people are more often than not the victims,” said Ray Landis, advocacy manager for AARP Pennsylvania in Harrisburg. “Older people often aren’t willing or able to do renovations, and they are more likely to be home during the day when fraudulent contractors may be cruising neighborhoods.”
Landis said older homeowners also tend to live in older homes that fall into disrepair.
AARP fought for 12 years to get the new law:
- It requires contractors to register with the state if they do more than $5,000 worth of home improvement work a year.
- It requires a written contract for jobs above $500 and limits the size of the deposit that can be collected in advance.
- Violators are subject to harsh penalties, especially when larger sums of money are involved and when the victim is over 60.
If, for example, the payment exceeds $2,000, the contractor can be charged with a third-degree felony. If the victim is 60 or older, that same crime could become a second-degree felony punishable by a $25,000 fine and up to 10 years in jail.
“Pennsylvania just became a very uncomfortable place for these bandits,” said Nils Frederiksen, a spokesman for the attorney general.
Consumers need to do their homework
Attorney General Tom Corbett urged consumers to do their homework before signing a contract. Get multiple estimates for every project. Check references before choosing a contractor. Contact the attorney general’s office or the Better Business Bureau to see if the contractor has drawn complaints or legal action.
Registration with the state and the $50 application fee may not thrill all contractors, but Jeff Consalvi, owner of Consalvi Contracting of Malvern, sees the need.
“We finish a lot of jobs where people hired someone who just took the money and ran. Perhaps in 10 percent of all the jobs I do, that’s the case,” the 14-year industry veteran said. “This law should help protect the guys doing a nice job, making homeowners happy, and not stealing money.”
Go to the attorney general’s Web site to find a link to a list of registered contractors or call 1-888-520-6680 toll-free. If you’re scammed, call local law enforcement and the attorney general’s office. The man who ripped off the Kistlers was arrested and told to return their money. So far, they’ve only gotten $1,400 back.
“Hopefully people will use this new law,” said Sandy Kistler. “We’re going to use it. That’s for sure. No more hiring contractors from advertisements on place mats.”
Russell Wild is a financial planner and writes about business and the economy. He lives in Allentown, Pa.