County Warns Consumers about Dangers of Doing Business with Unlicensed Home Improvement Contractors

Header--Montgomery County, Maryland. Press Releases

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Contact: George Rose, 240-777-3678 (Consumer Affairs)
Sue Rogan, 240-777-3722 (Consumer Affairs)
Donna Bigler, 240-777-6537 (Public Information)

For Immediate Release: May 31, 2000

County Warns Consumers about
Dangers of Doing Business with
Unlicensed Home Improvement Contractors

Montgomery County officials announced today that their Division of Consumer Affairs is launching an "Unlicensed Contractor Sweep" to alert consumers to the dangers of doing business with unlicensed home improvement contractors.

"Today, we are kicking off the campaign by contacting consumers in the same way unlicensed contractors find their victims: going door-to-door," said County Executive Douglas M. Duncan. "Teams of investigators are going door-to-door in areas that have been targeted by unlicensed contractors, and they are distributing flyers and brochures that warn homeowners about the dangers of doing business with unlicensed contractors. Homeowners deserve to know that there are risks involved if they hire unlicensed home improvement workers."

Maryland consumers lose over a million dollars each year to unlicensed home improvement contractors. Much of the work performed is either poorly done or incomplete, and many times no work is done at all. These unscrupulous contractors often target senior citizens for scams.

Maryland Law requires home improvement contractors to be licensed by the Maryland Home Improvement Commission (MHIC). This licensing requirement protects consumers by screening contractors for criminal records, requiring contractors to have trade experience, and testing contractors to ensure they know how to comply with Maryland's home improvement laws. Most importantly, consumers can recover up to $10,000 from the Home Improvement Guaranty Fund if they suffer a loss when doing business with a licensed home improvement contractor.

"Montgomery County is a prime target of the 'travelers" said George B. Rose, Chief of the Division of Consumer Affairs (DCA), Department of Housing and Community Affairs. "Travelers" are unlicensed contractors with no fixed business address who go state-to-state during warm weather periods. "They leave victims of their scams behind in each state," said Rose. "By the time you realize you've been had, they are nowhere to be found."

DCA urges consumers to follow these steps before entering a contract for any home improvement work:

1) Find out if the firm is licensed and how long it has been in business. As a general rule, the longer the firm has been in business, the better chance you have that the work will be completed properly. Call the Maryland Home Improvement Commission in Baltimore at 1-410-230-6309 for this information.

2) Get more than one estimate. Make sure price comparisons are for the same procedures and materials.

3) Check to see if the merchant has any complaints filed against it. Call DCA at 240-777-3636, the Better Business Bureau at 202-393-8000 and the Maryland Home Improvement Commission for this information.

4) Beware of any contractor who solicits business saying they "have material left over from another job in the area and can give you a real good price." This is a classic sign you may be dealing with an unlicensed contractor, and maybe even a "traveler."

5) Ask the contractor for the names of suppliers he deals with. The supplier may be able to tell you if the contractor is a long-time customer who pays his bills -- a good indication of reliability. Also ask for names and phone numbers of previous customers who live in your area and find out if they are satisfied. If possible, see the work that was done.

6) Don't rely on verbal promises. State law requires a written contract, including the terms and conditions of the warranty. The manufacturer's warranty should be a separate, written document. The contract must include: the contractor's name, address, and home improvement license number; the approximate starting and finishing dates; the work to be done and materials to be used; and the cost and terms of payment.

7) Don't sign any contract until you understand all the terms. 8) Don't advance full payment for the work. Under Maryland law, the initial deposit can be no more than 33 percent of the total contract amount. You can also negotiate for a smaller down payment. Interim payments should bear a reasonable relationship to the progress of the work. Inspect the job carefully before making the final payment.

9) Pay by credit card if possible. If paying by check, make sure the check is made out to the company, not to the individual making the repairs.

If a problem develops with a company, first try to resolve it with the company. If you can't, then contact the Home Improvement Commission at 1-410-230-6309, or call the County's Division of Consumer Affairs at 240-777-3636.

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