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Consumer News Release

For immediate release -- Wednesday, May 2, 2001.
Contact Bob Brammer, 515-281-6699

Miller: Avoid Flood-Related Consumer Scams

Attorney General Tom Miller warned Eastern Iowans to be wary of consumer scams that sometimes strike in the wake of natural disasters like this year's flooding along the Mississippi.

"Home repair con-artists sometimes move in after a disaster because the conditions may give them an edge," Miller said. "There may be hundreds of people who are eager to get clean-up or repairs done, there may be a shortage of local contractors to do all the work, there may be money around because of disaster or insurance payments, and people may be in a rush to get back to normal."

Miller cautioned Iowans to be especially careful about contractors coming to their door and asking for advance payment for cleanup or repairs. "That's a recipe for rip-off. They may take your money and run and do little or no work," he said.

"We strongly urge people to work with reputable local contractors who were there before the flood and will be there after," Miller said. "Get several written estimates, get a written contract with all details and costs, and never pay large sums in advance to a contractor you don't know. Those are the cardinal rules to avoid being cheated."

Miller issued a "Consumer Advisory" bulletin with details on those tips and others. The Advisory is available at the Attorney General's web site: www.IowaAttorneyGeneral.org (click on "Consumer Protection Information") or by calling the Consumer Protection Division at 515-281-5926.

Miller also encouraged consumers to contact the Consumer Protection Division if they have consumer complaints about questionable contractors, or about price-gouging - charging exorbitant and unjustified prices for products or services that are necessary for disaster victims.

Iowa regulations make price gouging illegal when a disaster declaration is in effect, as it is for many counties in Eastern Iowa. (Price gouging is defined in the Attorney General's Administrative Rule 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 recognizes that prices may be higher because sellers also often incur increased costs. The Rule applies during the emergency declaration and "subsequent recovery period" up to six months.)

Miller said the Consumer Protection Division sometimes sees other scams that crop up in connection with natural disasters - charity scams (fraudulently soliciting donations for bogus charities purportedly to help disaster victims), advance-fee loan scams (taking money in advance supposedly to arrange a 'guaranteed' loan but never providing the loan), and con-artists presenting themselves as utility or government officials to get into people's homes for purposes of theft or other scams.

"Unfortunately, con-artists have earned a reputation for preying on people when they're down," Miller said. "Cheating flood victims is the definition of adding insult to injury. People need to be careful as the waters go down and recovery gets into full swing."

Miller emphasized that he is hopeful that flood-related consumer scams can be avoided in Iowa. "Iowans are smart consumers. People have worked hard to reduce the number of homes damaged and the amount of damage, and I'm hoping we have a sufficient number of reputable local contractors to handle the work. I think the con-artists may conclude that this is not good territory for them to try their schemes," he said.

"But an ounce of prevention is worth a pound of cure when it comes to consumer fraud," Miller said. "We just want Iowans to be careful and use their good common sense."

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