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Sep 30

Attorney General warns Iowa flood victims and “storm chasers” about consumer protections

Flooding in Cedar Rapids

Flooding in Cedar Rapids

CEDAR RAPIDS – Attorney General Tom Miller today cautioned both consumers and contractors that certain consumer protection laws are in place to safeguard Iowa’s flood victims.

“As Iowans transition into the cleanup phase of this disaster, this is fair warning that our state will not tolerate those who try to take advantage of flood victims,” Attorney General Tom Miller said. “Iowans who need professional help for flood-related cleanup or repairs need to know how to protect themselves from fraud.”

Price Gouging Rules in Effect for Counties Declared Disasters
Governor Terry Branstad’s disaster emergency proclamations have triggered the state’s price-gouging rule in all affected counties.

The rule defines price gouging as raising prices unreasonably above the price at which the merchandise or service was sold in the usual course of business immediately prior to the onset of the emergency. The rule, which applies during the emergency declaration and “subsequent recovery period” up to six months, recognizes that prices may be higher because sellers also often incur increased costs.



Heightened Concerns over Door-to-Door Cleanup and Repair Offers
While consumers should have ready access to reputable cleanup and repair businesses, Miller cautioned flood victims to be wary of those who solicit business door-to-door.

“Be especially cautious about anyone who shows up at your front door seeking business. While not everyone who solicits business at your door is bad, these are the situations where we tend to see certain contractors trying to take advantage of flood victims,” Miller said. “They may pressure you to pay up-front and leave without finishing the job or not doing it right.”

Consumer Tips for Flood Victims

  • Check out the contractor before you sign a contract or pay any money. Ask if the contractor is registered with the Iowa Workforce Development’s Division of Labor Services. You can check a contractor’s registration online through the Division of Labor Services website, or call 1-800-562-4692 or 515-242-5871). Be sure to check local references. Also, check Iowa Courts Online for past court cases, and see if there are complaints on file with the Better Business Bureau and the Attorney General’s Consumer Protection Division.
  • Get it in writing. Seek several written estimates for the job you want done. Before any work begins, agree on a written contract detailing work to be done, responsibility for permits, costs, and any other promises. Request a copy of the contractor’s liability insurance certificate. Put start and completion dates in writing and consequences if the contractor fails to follow them (For example: The contract could be nullified if the contractor doesn’t start on time.).
  • If you don’t know the contractor personally, consider collecting identifying information about the contractor before signing a contract. This could be your one chance to collect this information should something go wrong. Write down or take a photo of the license plate on the contractor’s vehicle, any professional licenses or certifications, and even the person’s driver’s license. If the contractor objects to providing this information, you might want to reconsider hiring that contractor.
  • Avoid paying large sums in advance to a contractor. If you have to make a partial advance payment for materials, make your check out to the supplier and the contractor. Insist on a “mechanic’s lien waiver” in case the contractor fails to pay others for materials or labor.
  • In most cases, Iowa’s Door-to-Door Sales law gives you three business days to cancel a contract signed at your home.

Special Information for Cedar Rapids Residents Regarding Contractors
The City of Cedar Rapids requires residents to hire state-registered contractors to repair damage before it is safe to return electrical and/or gas utilities. The city has established a phone line to verify whether a contractor is properly registered and licensed: 319-286-5929. This is for verification not a contractor referral resource.

The contractor must obtain a city flood permit to make repairs. The city has waived the fee for flood permits for all repairs within the flood inundation level.

Upon completion of work, a city inspector must inspect the work, and if determined safe, will authorize utility crews to restore service.

Cedar Rapids residents can find additional information at:
www.cedar-rapids.org/alert_detail.php

Advice for Contractors

  • A consumer contract must contain all of the material terms, and be fully disclosed to the consumer before the consumer signs the contract – and the contractor must leave a complete copy with the consumer after it is signed.
  • While a contractor can advise a consumer on what work and materials are needed to repair storm damage, the consumer must be the person to negotiate the insurance claim with the insurance adjustor or the company.
  • If the Iowa Door-to-Door Sales Act applies to the sale, the seller must use the proper language and format required in Iowa, and provide the proper Iowa cancellation forms at the time of sale. (Use of any other form could result in the voiding of the contract as well as civil penalties.)
  • A seller cannot include provisions in a contract that materially misrepresent the legal rights of either party, even if the seller has no intention of enforcing the misrepresentations.
  • A person collecting on a consumer debt cannot threaten to take action that the collector has no intention of taking.
  • If the contractor intends to enforce the document as a contract, the document must clearly and conspicuously disclose that it is a binding contract before the consumer signs it.
  • State law prohibits price gouging when a county has been declared a disaster area.

Consumers should contact the Consumer Protection Division if they have consumer complaints about questionable contractors or about price-gouging:

Web: www.iowaattorneygeneral.gov
Phone: 515-281-5926 (toll-free number outside of the Des Moines area: 888-777-4590)
Email: consumer@iowa.gov

Insurance Complaints
For complaints regarding coverage under an existing insurance policy, consumers should contact the Iowa Insurance Division:

Web: www.iid.state.ia.us
Phone: 515-281-5705 (toll-free: 877-955-1212)
Email: market.regulation@iid.iowa.gov

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