Pa. AG concerned with post-flood scams

By Jessica M. Karmasek | Sep 12, 2011


HARRISBURG, Pa. (Legal Newsline) - Pennsylvania Attorney General Linda Kelly is warning residents and victims of last week's near-record flooding to be on the lookout for potential consumer scams.

Last week, the remnants of Tropical Storm Lee closed roads and schools and forced the evacuation of thousands for what is considered the Susquehanna River's worst flooding in nearly 40 years.

"It is important for consumers to remain vigilant, understand their rights and carefully evaluate contractors they hire to repair homes or to address other storm damage," Kelly said in a statement Friday.

"Unfortunately, natural disasters can be a magnet for scam artists and unscrupulous operators who are more interested in taking money from storm victims than in helping them recover from this devastating flood."

Kelly said most consumer complaints following disasters include home repair scams, government loan or grant schemes, fraudulent disaster-related fund-raising efforts and concerns about price gouging.

"As the storm passes, it is natural for homeowners to look for speedy repairs -- hoping to return to 'normal' activities as quickly as possible," the attorney general said. "Still, consumers should not allow the desire for immediate repairs to cloud their judgment regarding contractors."

Kelly noted that all home improvement contractors who do more than $5,000 worth of business per year in Pennsylvania are required to register with the attorney general's Bureau of Consumer Protection.

Additionally, all of those businesses are required to provide consumers with specific information before proceeding with any project, including the contractor's registration number and a written contract for any project costing more than $500, among other things.

Kelly also noted that the state's Home Improvement Consumer Protection Act limits the amount of any up-front payments that contractors can collect. For projects costing more than $5,000, contractors may not accept advance payment of more than one-third of the total price of the contract.

Kelly encouraged consumers to get multiple estimates for any major project, to check references for recent work before committing to a project and to be wary of individuals who approach you with stories of "just being in the neighborhood" or other unsolicited offers that seem "too good to be true."

Kelly said that government aid for communities and businesses also is an issue. Many victims, she said, may not be familiar with how such programs operate.

"Scam artists attempt to prey on desperate storm victims who are looking for assistance -- requesting up-front payments in order to process applications for 'loans' or other 'disaster aid,' or to search for grants and other funds," she said.

"It is important for everyone to understand that legitimate government assistance programs and relief agencies do not ask for pre-payment from disaster victims."

Kelly urged storm victims to contact their local governments directly to get a list of available disaster-relief programs -- checking with their local city, borough or township office; their county emergency management office; the Pennsylvania Emergency Management Agency; the Federal Emergency Management Agency; and the U.S. Small Business Administration, along with the American Red Cross.

Kelly said in times of disaster scammers also may attempt to take advantage of peoples' desire to help their neighbors by collecting contributions for non-existent charities or other deceptive solicitations.

She urged consumers to be wary of high-pressure tactics and door-to-door collections; ask for details about any charity before you make a donation; request information about how funds will be spent; and make contributions directly to the charity -- do not give cash donations.

Charitable organizations operating in Pennsylvania are required to register with the PA Department of State. Consumers can check the registration status of charities using the Department of State's online database or by calling the Department of State Charities Bureau at 1-800-732-0999.

Kelly said Pennsylvania's price gouging law is intended to protect consumers and businesses from sudden, unwarranted price increases during emergency situations.

The price gouging restrictions are triggered by the declaration of a state of emergency and apply to anyone involved in the distribution or sale of consumer goods or services.

The price restrictions apply to businesses involved in direct consumer sales, along with manufacturers, suppliers, wholesalers and distributors.

Gouging is defined as a price increase of more than 20 percent above the average prices observed during the week before the emergency declaration.

Kelly said the law gives the Bureau of Consumer Protection the authority to investigate price gouging complaints and allows for penalties of up to $10,000 per violation.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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