This article extracts Home Improvement-related complaints from the recently released 2018 Consumer Complaint Survey conducted by The Consumer Federation of America (CFA). If you should need to file a complaint yourself, there is a link at the end of this article to find your local state’s consumer protection office to do so.
Home Improvement Ranked #1 for Worst Complaints
Home Improvement and Construction-related complaints were ranked at the top in terms of “worst” types of complaints and ranked second highest in terms of the overall number of all types of consumer complaints. The classification of “worst complaints” was based on the following criteria: number of complaints; dollar amount involved; impact on vulnerable consumers; and “sheer outrageousness” of the situations.
Unsurprisingly, Home Improvement and Construction is a recurring top complaint category, as this type of issue often involves significant amounts of money and can cause great inconvenience. Consequently, consumers are more likely to report problems and seek help. Home Improvement and Construction also topped the list of worst complaints, as the most severe situations can make residences uninhabitable and create extreme emotional distress.
Background on the CFA Consumer Complaint Survey
The annual report consists of survey findings from state and local consumer protection agencies (35 agencies from 21 states across the U.S.), to better understand areas in which consumers filed complaints. The report further classifies the most pressing and the most underlying issues. It is important to note that the survey does not include agencies that focus solely on one industry, such as state licensing boards for construction and home improvement. The reason for this approach is to be able to compare relative complaint volumes and trends across multiple consumer interest areas.
The participating agencies collectively received 1.1M complaints in 2018. This averages to 125 complaints filed daily per agency. Complaint numbers do not include inquiries that asked for advice or information from consumers or businesses.
The Role of State and Local Consumer Protection Agencies
The survey is a helpful reminder that, in the area of home improvement, local consumer protection entities exist to proactively educate homeowners (rights & responsibilities) and to provide aid when consumers encounter serious problems with contractors and vendors. These agencies usually mediate complaints informally. However, many consumer protection entities also have the power to enforce the law through administrative procedures, civil action or criminal prosecution.
These agencies are the first line of defense for consumers, providing the following types of support: righting individual wrongs; stopping abusive practices in the marketplace; recouping payments; and eliminating or reducing the amount of outstanding payments.
Many consumer issues are not covered by federal law, including high-volume complaint categories, such as home improvement. Even when there is overlapping federal jurisdiction, state and local governments are often better suited to address violations and to enact new laws to keep up with emerging market challenges. Thus, these agencies can be a great source of updated information on consumer rights pertaining to home renovation projects. It is good practice to check if any laws or requirements have changed since your last major renovation project.
Here is the full list of complaint categories, by volume, in which Home Improvement was ranked 2nd.
Top 10 Consumer Complaints by Category and Volume in 2018
- Auto: Misrepresentations in advertising on sales of new and used cars, lemons, faulty repairs, auto leasing, rentals, and towing disputes.
- Home Improvement/Construction: Shoddy work, failure to start or complete the job.
- Retail Sales: False advertising and other deceptive practices, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, failure to deliver.
- Services: Misrepresentations, shoddy work, failure to have required licenses, failure to perform.
- (Tie) Landlord/Tenant: Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics;
Utilities: Complaints about gas, electric, water and cable billing and service.
- Health Products/Services: Misleading claims, unlicensed practitioners, failure to deliver, medical billing issues.
- (Tie) Credit/Debt: Billing and fee disputes, mortgage modifications and mortgage-related fraud, credit repair, debt relief services, predatory lending, illegal or abusive debt collection tactics;
Communications: Misleading offers, installation issues, service problems, billing disputes with telephone and internet services.
- Internet Sales: Misrepresentations or other deceptive practices, failure to deliver online purchases.
- Home Solicitations: Misrepresentations, abusive sales practices, and failure to deliver in door-to-door, telemarketing or mail solicitations, do-not-call violations.
- (Tie) Household Goods: Misrepresentations, failure to deliver, faulty repairs in connection with furniture or appliances;
Fraud: Bogus sweepstakes and lotteries, work-at-home schemes, grant offers, fake check scams, imposter scams and other common frauds.
Common Consumer Complaint Themes
Items that caught our attention from other categories that are also pertinent to Home Improvement projects, included:
- Misleading Advertisement
- Failure to Deliver
- Faulty Repairs
- Billing and Fee Disputes
- Deceptive Practices
- Defective Merchandise
- Unlicensed Practitioners
- Misleading Offers
- Abusive Sales Practices
- Failure to have Required Licenses; and
- Predatory Lending
The elderly are also highly prone to being preyed upon by unethical and criminally-minded vendors.
Other problems mentioned in the report, that you should be especially cognizant of, include:
- Financing Programs
- Rent-to-Own Programs
- Suspicious Referrals
- Potential Conflicts of Interests
- Price Gouging
- Services Not Rendered or Completed
- Unauthorized Charges or Bank Withdrawals
- Liens; and
- Scams that explicitly Target the Elderly
Key Callouts Related to Home Improvement and Homeownership
Connecticut: Crumbling Foundations
For the Connecticut Department of Consumer Protection, the issue that continued to cause the most financial hardship for homeowners was crumbling foundations in some homes that were built in the eastern part of the state. The agency’s investigation determined that the presence of the mineral pyrrhotite in the concrete used in the foundations is a factor in the cracking. While the state’s Attorney General concluded that there were no grounds for action against the company that owns the quarry where the aggregate originated under the Connecticut Unfair Trade Practices Act, the company has signed an Assurance of Voluntary Compliance promising not to pour new residential foundations at this time.
There are over 800 complaints and the number continues to grow. In response, Connecticut enacted legislation to place a small surcharge on homeowners’ insurance policies, the proceeds of which go to a Healthy Homes Fund to help these families. The most up-to-date information about resources for homeowners can be found on the Connecticut Department of Housing’s website.
As some construction problems can take years to be detected, property owners should contact the responsible contractor as soon as problems are discovered, even if the warranty has expired. Take pictures and keep notes as on-going documentation. If the issue is faulty materials, it is likely that other homeowners may be experiencing the same problem. Also report your issue to your state or local consumer agency, and ask for advice on next steps.
Massachusetts: Solar Installations
Solar installations continued to generate complaints to state and local consumer agencies. In one particularly challenging case last year, a man sought assistance from the Massachusetts Attorney General’s Office with a problem selling his deceased parents’ property. They had signed a 20-year lease on solar panels. As is customary, the solar company had filed paperwork that created a lien on the property with the state registry of deeds. That company went out of business and a new solar company took over the lease. In order for the property sale to go through, the lien needed to be temporarily lifted and then reset. Unfortunately, the man was unable to get the solar company to cooperate. Fortunately, the agency was able to help resolve the problem with the lien and also worked with the buyer’s mortgage lender to ensure that the pre-approval and interest rate stayed locked in, while the matter was being dealt with.
Many states have enacted laws concerning solar sales and leases. Before you sign a contract, ask your state or local consumer agency about your rights and the company’s responsibilities. Be sure you understand the terms and what will happen if you decide to sell your home or no longer want solar power. Get a written contract that spells out everything you’ve been told. Any liens that will result from that work should be clearly disclosed upfront and consumers should have the right to contest those liens when there are omissions of important information, false or misleading claims, or problems with performance of the work.
Free guides can be found at the Solar Energy Industries Association.
New Mexico: Abusive Practices by Roofers
In an effort to address abusive practices by roofing repair companies that go door-to-door after storms, New Mexico passed a law prohibiting roofers from acting as agents for homeowners in dealing with insurance claims for the work that their contractors would be performing. This practice is perceived as a conflict of interest. For this reason, you should always refrain from using any contracting services, if offered, by an insurance claims adjuster. Insurance claims adjusters should perform their services agnostic to who will be performing remediation work.
According to the Insurance Information Institute, a public adjuster is an independent insurance professional that you can hire, at your own expense, to help you settle an insurance claim. It is not the same as the adjuster that your insurance company may provide, at no cost to you, to evaluate your claim. To prevent conflicts of interest, some states bar public adjusters from acting as contractors to make the repairs covered by the claims that they are handling.
South Carolina: Homeowners Associations (HOAs)
The fastest-growing complaints to the South Carolina Department of Consumer Affairs last year were about homeowners associations (HOAs). In response, South Carolina enacted legislation last year to address HOA-related issues, primarily pertaining to transparency, such as: board meeting minutes; assessment of fees and fines; and granting homeowners access to records. Transparency should also exist around HOA recurring contracts and repairs to ensure that there are no conflicts of interest with board members and homeowners.
Typical problems included failure to enforce covenants and bylaws, failure to notify residents about board actions, and failure to produce financial statements. Multiple complaints against one homeowner’s association were resolved when it agreed to hire an independent firm to audit its accounting records and to begin producing quarterly audits. If you believe the rules of your homeowner’s association are not being properly followed, your state or local consumer agency may be able to give you advice and assistance.
The law requires sellers to disclose to potential buyers that a home is governed by an HOA, gives Magistrate Courts jurisdiction over monetary disputes in HOAs, and requires the South Carolina Department of Consumer Affairs to collect data about problems with HOAs through its complaint process and to produce an annual report.
Tennessee: Licensed Contractors Awareness Campaign
Since home improvement has been a perennial top complaint category at the Tennessee Division of Consumer Affairs, the agency conducted a marketing campaign at the beginning of 2018 to promote a state website that can be used to check if contractors are licensed. The campaign also highlighted consumer tips on selecting reliable contractors. Through a marketing outreach program, the campaign reached close to 400,000 consumers. When the top complaint categories for 2018 were compiled, the number of complaints in the Home Improvement category had dropped from the top spot, in the prior year, to the third spot in 2018. This is proof that education and awareness can dramatically improve experiences and results with your home renovation projects. That said, additional Purgula articles and third-party resources are listed below to help you prevent some of these persistent problems encountered with home improvement projects, as well.
How to Deal with a Bad Contractor and Reset Your Renovation
Signs of a Bad Contractor Before You Sign a Contractor
How to Choose a Trustworthy Contractor
How to Increase Your Chances of Hiring a Good Contractor
How to Start Your Renovation
Key Elements of a Renovation Contract
Renovation Permits 101
Key Concepts of Construction Warranties
When to Sign Your Project Completion Form