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April 24, 2013

Attorney General Warns Iowa Flood & Storm Victims to Beware of Scams

Price gouging rules now in effect in counties proclaimed disasters

(DES MOINES, Iowa)  Attorney General Tom Miller advised Iowans in counties proclaimed disasters by Governor Branstad to beware of the potential for scams and consumer protection issues that could emerge in those areas.

“Contractors we call ‘storm chasers’ head to these areas to convince flood and storm victims to hire them on the spot for cleanup and repair work,” Miller said.  “Iowans should be on the lookout for these contractors who show up at the door or call.”

  • Be wary of contractors who show up at your door.  If at all possible, deal with an established and reputable local business.  Try to deal with a local outfit even if it's not an established contractor.  Avoid the hard sell.

  • Check out and interview contractors before you sign a contract or pay any money.  Request local references and contact them!

Check on complaints with the attorney general’s office (515-281-5926, or 888-777-4590) and check with the Better Business Bureau.  Check to see if a contractor has been sued by unsatisfied customers (or sued them) through Iowa Courts Online.

Check on a contractor’s registration and bonding (which doesn’t guarantee quality of work) at  Ask for a copy of the contractor's liability insurance certificate.

Be wary of a person or company not listed in the local telephone directory.  Contractors who don’t provide a local phone number or a local address (watch for post office box numbers and “office suite” numbers) are probably not local.

  • Get several written estimates, choose the best, and get a contract in writing (and don’t forget to read it!).  Before work begins, agree on a written contract detailing terms including the work to be done, the brand and/or the specifications of the materials to be used, the price, who is responsible for permits, and that all change orders must be in writing.  Put start and completion dates in writing, and the remedies if the contractor fails to meet them.  (Example: the contract could be nullified if the contractor doesn't start on time.)

  • Insurance claims: If you’re filing an insurance claim to cover the costs of damages, negotiate the details with your insurance company directly and not through a contractor.  Make sure your insurance provider will cover the cost of repairs before you sign a contract.

  • Financing: It’s usually safer and a better deal to obtain financing through your local bank or credit union, rather than a contractor.

  • Your right to cancel: If you sign a contract somewhere other than the contractor's regular place of business, such as at your home, you have three business days to cancel the contract without penalty.

  • Avoid paying large sums or the entire job up-front.  If you need 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.

  • Write down a license plate number and vehicle description, or take a picture of the vehicle and plate.  Keep this for your records.

Price Gouging
Price gouging rules are now in effect in counties declared disaster areas.  Price gouging is charging very high prices that are not justified, and taking unfair advantage of disaster victims.

Go to for more tips on preventing scams, and for more information on hiring contractors, price gouging and donation scams.

If you think someone has broken the law, contact local law enforcement.  To file complaints or to ask questions, contact the Attorney General's Consumer Protection Division, Des Moines, IA 50319.  Email or call 888-777-4590 (toll-free outside of the Des Moines area) or 515-281-5926.


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