California takes steps to stop home repair scheme

By Legal News Line | Mar 24, 2009

Jerry Brown (D)

SAN DIEGO, Calif. (Legal Newsline) - California Attorney General Jerry Brown and the state Contractors State License Board have reached an agreement that Brown believes will stop a statewide home repair scheme that overcharged thousands of home owners.

The attorney general's office conducted an investigation for months, concluding that SRVS Charge Inc. and its affiliated companies had been cheating more than 5,000 homeowners annually since 1989.

"This massive scheme defrauded thousands of California homeowners who were charged exorbitant fees for shoddy and woefully inadequate home repair work by unlicensed and unskilled contractors," Brown said Monday. "The agreement stops the illegal practices and gives homeowners a chance to recover some of their losses."

The agreement, approved by the San Diego Superior Court two weeks ago and made public on Monday, includes a permanent injunction against multiple defendants connected to SRVS

The Contractors State Licensing Board will monitor the company for a year, ensure all technicians are qualified and pass a criminal background check and prevent the company from over-charging its customers. A total of $3 million in penalties and restitution is included in the terms of the settlement.

"This settlement is a victory for California consumers and legitimate contractors, and brings resolution to thousands of hours of investigative work," CSLB Registrar Steve Sands said. "Victims will now be able to regain some of their money, and CSLB will be able to watch this company closely so others aren't harmed."

The attorney general's investigation, which included undercover operations, discovered the company bought millions in advertising listing several companies. All calls were routed to a single operations center. Unqualified contractors were dispatched, often from a company different from the one the customer originally called.

Customers were then charged for a variety of services including those not requested. If the customer refused to pay, the attorney general's office stated, the company would file a lien against the home.

The attorney general's office had tried to shut down the operation several times over the years but "the defendants continued to run their company under a labyrinth of business names and fraudulent contractor license numbers that were interchangeable," the attorney general's office stated.

Brown said the exorbitant fees allowed owners of the company to purchase two helicopters, one Mercedes-Benz and more than $1 million real estate, all of which the attorney general's office seized.

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