By: Tyler Beaston*
As a business owner, it’s inevitable that you will face complaints from customers, no matter what product or service you sell. Maybe the complaint will lack legitimacy because, as most businesspeople know, the customer is not always right. Unfortunately, there are times when a businessperson will make a mistake or, worse yet, will actively run a company in a way that injures consumers. Surely no professional would do something to push customers away, you say. Yet, oddly enough it does happen, and often in the context of home improvement contractors. Consequently, Pennsylvania, among other states, has a whole law devoted to making sure home improvement contractors meet certain requirements — and this law is in addition to the general Consumer Protection Law. Both of these laws are enforced by the Office of Attorney General’s Bureau of Consumer Protection (OAG & BCP) against businesses and contractors who do consumers wrong.
However, because you’re reading this article, there’s a good chance you are on the path to avoiding any unwanted interactions with the Office of the Attorney General.
But let’s say the worst happens: You’re a home improvement contractor (or any business owner), and an unhappy customer contacts the OAG to file a complaint against you and your company. What happens next?
Tips for Dealing with the OAG
Obviously, the action the OAG ultimately takes depends upon whether or not you’ve actually done something wrong. The BCP typically operates almost as a mediator between the consumer and the alleged violating business, which means that it will collect information from both parties and determine how best to move forward.
Gather all relevant documents and paperwork, if you have them. The OAG is usually quite specific in what documents it wants from you. To save time and additional confrontation in the future, keep all documents together, and organize them if possible. Required documents could include copies of contracts, receipts, correspondences with consumers, tax filings, etc.
The law that governs businesses is called the Consumer Protection Law (CPL), 73 P.S. § 201-1 et seq. It sets the standard regarding unfair business practices. The Home Improvement Consumer Protection Act (HICPA), 73 P.S. § 517.1 et seq. outlines additional guidelines for home improvement contractors to follow.
The OAG’s primary goal is to obtain restitution for the consumer; the OAG is willing to work with individuals and companies who are in violation of HICPA or the CPL by creating flexible restitution and penalty payment plans.
Four OAG Actions Against Your Business in Order of Increasing Severity
- Nothing — happens after the OAG investigates the case and finds no violations or none worth pursuing. It could be the result of an angry customer who filed a complaint, or it could be simply a single violation that’s already been corrected on your part. Either way, the complaint against you is resolved, and you can rest easy (as long as you continue to follow the law). It goes without saying that this is the optimal situation for you.
- Warning Letter — happens if the violation is small or insubstantial in nature. Generally, a letter is sent if your violation is so minor that it’s not worth taking legal action against you. The letter will state what violations exists and recommendations for fixing them. It will state the potential penalties for continuing to violate the law and will leave open the likelihood of action on the part of the OAG if your business does not comply with the laws of which you’ve been warned. In the context of home improvement contractors, a letter may be sent when the business fails to list its HIC number on its advertisements or vehicles; it might show up if a contract is not perfectly compliant with the law; it could also appear if the business did not register a fictitious name with the PA Department of State. For more information about fictitious names, read my blog post here.
- Assurance of Voluntary Compliance (AVC) 73 P.S. § 201-5. An AVC is a document filed with the court, meaning it carries legal weight. Therefore, it’s not to be taken lightly. The good thing about an AVC is that it contains no “confession” of wrongdoing on your part — but to be completely straightforward, if you hadn’t done anything wrong, there wouldn’t be a need for an AVC. An AVC will often be filed when the case against you is very strong. If you were to be sued, you’d likely lose, so an AVC is letting you off the hook, so long as you comply with its terms.
The AVC will contain a list of the violations, the penalties and costs associated with each, the amount of restitution you owe, and the payment plan to be applied. It also will likely include a section saying that you are disallowed from operating your business in a way that violates the CPL and HICPA. Also, be aware that violating the AVC will be grounds for additional penalties. - Shut Down the Business 73 P.S. § 201-9. This option has been described as “going nuclear,” and it’s not exactly wrong. The OAG can request that a court “order the dissolution, suspension or forfeiture of the franchise or right to do business of any person, firm or corporation which violates the terms of an injunction …” Fortunately, this approach is pretty rare and used only against people or businesses that consistently refuse to follow any consumer protection or home improvement contractor laws.
For Example:
I once heard of a contractor who completed a hardscaping job for a customer. Evidently unhappy with the work, the customer filed a complaint with the OAG because the color was wrong and the sealant flaked off. The contractor responded to the OAG’s inquiry and said that the customer was at fault because he improperly used ice melt on the hardscaping. The contractor also knew that the customer had complained about other businesses in the past. Nevertheless, the hard-scaper offered to remove all the work for free.
The customer’s response? No thanks — I’ll keep it.
The OAG agents and attorneys were made aware of the refused offer, and they consequently found that the contractor was not at fault. In short, they selected option 1 — do nothing.
Later, when the customer decided to sell his house, he posted five pictures. Three of them were of the hardscaping. All that to say, some consumers will fraudulently try to get something for nothing.
Final Points to Remember
First, know that civil penalties go as high as $1,000 per violation, or $3,000 if the wronged consumer is 60 years old and above. This amount is added on top of any restitution owed to a consumer, meaning that penalties can rapidly add up.
Also note that, in addition to the BCP, individuals can sue under 73 P.S. § 201-9.2 of the CPL.
Finally, be aware that a violation of HICPA is also a violation of the CPL. 73 P.S. § 517.10.
Armed with this information, you should be well on your way to avoiding, or at least lessening the effects of, any unhappy confrontations with the OAG.
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*This post was checked for currency on August 24, 2018 and reproduced with permission by author Tyler Beaston. Original post can be found here.
Tyler Beaston, at the time of this post, is a third year law student from Penn State’s Dickinson Law. He is from Lancaster, Pennsylvania. Tyler has worked for the Pennsylvania Office of Attorney General’s Bureau of Consumer Protection, which handles consumer complaints against businesses. A more complete bio can be found here.
References
Photo is sourced from here.
Consumer Protection Law, 73 P.S. § 201-1 et seq.
Home Improvement Consumer Protection Act, 73 P.S. § 517.1 et seq.
