Ky. AG Warns Public of Shady Contractors

December 31, 2004

In response to the recent winter storm that hit Kentucky and the governor’s declaration of a state of emergency, Attorney General Greg Stumbo warned consumers to be mindful of fly-by-night contactors offering to repair damages caused by ice and snow and reminds consumers to be aware of possible of “price gouging.”

In April, a state law was passed forbidding excessive price increases during a declared national or local emergency. The law was the result of a bill sponsored by Rep. Tommy Thompson (D-Owensboro) and supported by Stumbo.

In the aftermath of the storm, consumers should be aware of the following regarding the price gouging law:

• The fairness of prices on food, cleaning and medical supplies, gasoline, building materials, housing and repair and reconstruction services are judged by the going rate in the area prior to the declaration of emergency. Prices may not be grossly in excess of the pre-emergency rate.

• Excessive price increases are only permitted when sellers can show the increase is related to increased supplier or labor costs.

• The rules remain in place for 180 days for repair and reconstruction services.

“We saw prices for goods and services rise following the ice storms in Lexington a few years ago. Price gouging legislation now makes that type of unscrupulous pricing illegal,” Stumbo said. As Stumbo’s wife, Mary Karen, testified during the passage of the bill, “times of emergency are when consumers are the most vulnerable.”

The storm has resulted in damage affecting many consumers. Consumers needing work done quickly to repair damage caused by ice and snow could also be at risk from the threat of unscrupulous fly-by-night contractors, also known as “storm chasers.”

Stumbo’s Consumer Protection Division provided the following tips to consumers needing storm repair or clean up services:

• Never pay in advance for labor. If a contractor requires a substantial advance payment for labor, be very suspicious. Scam artists often take advance payments from consumers and never return to complete the work. If a contractor needs an advance to purchase materials, offer to purchase the materials yourself.

• Use local, reputable contractors for repairs if possible. If local contractors bring in out-of-town workers, ask who will be responsible for their work if it is not satisfactory;

• Ask if the contractor is licensed, bonded (if required by the city or county), and insured;

• Check unknown companies out with the Better Business Bureau (Louisville/Western KY 1-800-388-2222; Lexington/Eastern KY 1-800-866-6668);

• Demand a written contract. If possible, get estimates from several contractors;

• Be suspicious of unfamiliar, out-of-state vehicles and those who offer repair work at unreasonably low prices. Contact local law enforcement about your suspicions.

“Con artists who take advantage of other people’s misfortune are beyond contempt. We will use all the enforcement tools at our disposal to vigorously prosecute fly-by-night storm chasers,” said Stumbo. Stumbo is urging consumers to call the Consumer Hotline at 1-888-432-9257 to report any incidents of possible fraud, price gouging or shoddy construction work and repair.

Gov. Ernie Fletcher’s office has declared a state of emergency for central and western Kentucky. The declared counties include: McLean, Hancock, Livingston, Hopkins, City of Providence, City of Owensboro, City of Falmouth, City of Butler, Todd, Daviess, Crittenden, Carlisle, Shelby, Muhlenberg, Pendleton, Bullitt and Grayson.

According to Fletcher, additional counties are expected to be declared as local authorities assess the damage.

Was this article valuable?

Here are more articles you may enjoy.