The House Committee on Business & Industry met on July 24 at City Hall in Houston to hear invited testimony regarding consumer rights and protections with a focus on Hurricane Harvey and disaster recovery.
This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing, but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
Charge #2:(Partial) Review all existing law concerning consumer rights and protections, including but not limited to statutes that address deceptive practices, landlord/tenant agreements, and homeowner/contractor disputes. Determine whether the provisions offer adequate guidance and protections in disaster and recovery situations.
Leah Napoliello, Better Business Bureau of Greater Houston and South Texas
- Have received roughly 200 complaints in the aftermath of the hurricane
- Oliveira – What’s the process like?
- A written complaint is required; a copy of the complaint is sent to the business, which has 14 days to respond to the complaint. After 2 attempts to get a response from the business regarding the complaint, a note is made in their business profile
- There can be a bit of back and forth before a complaint is resolved
- Stickland – You said 200 during hurricane Harvey, what is it normally like?
- Typically, we get a couple hundred a year. We have received 200 additional complaints because of Harvey. A lot of the complaints we are getting are the ones that haven’t been answered yet
- Stickland – that sounds low, did you think it would be higher than that?
- Did think it would be higher, the ones we are getting in are ones that are not getting resolved, which is concerning
- We don’t add them to our review if lawsuits are underway already
- Oliveira – do you know how many lawsuits are already underway?
- We do not have that information
- Majority of complains composed of unfinished jobs by contractors, and shoddy work by contractors that will require additional services to finish
- Oliveira – How many of these would have involved insurance?
- We don’t see a lot of complaints involving insurance.
- Romero- What percentage of these complaints were member companies?
- We had 2-member companies that had to be revoked in the aftermath of hurricane Harvey, majority are non-member companies
- Romero – is it typical to receive complaints about non-member companies?
- Yes, it is
- Oliveira – How many complaints of the 200 have you already addressed?
- Majority have not been resolved. We try to get a response, but the businesses fail to resolve the issue.
- A public report will be issued on any business that receives a report, this report impacts the letter grade we assign them.
Tangie Louis, Self
- Lives in a neighborhood that was considered a disaster area, took the recommendation of a friend and neighbor who had a reputation for being a Christian and hardworking
- Hired Charles Hodge from Better Choice Construction
- The work was done but it was very sloppy, holes in door frames, the baseboards are falling apart
- Payed the company $22,000, only to receive a very unfinished job
- Plans on taking legal action against the contractor
- Oliveira – Was insurance money involved?
- My neighborhood is a new neighborhood, I didn’t have flood insurance because we were in the “100-year flood plane”
- Oliveira – Do you know if this individual is still around?
- Yes, he is still around
- There is no recourse for as consumers when jobs are done poorly, if they do not respond to the BBB then we can only sue
- Oliveira – Did he have licenses?
- I did not get his license number. He had been in business for 7 years and believed the word of her friend.
- Romero – What kind of contract did you have?
- General contract
- Romero – How did it read financially for the payment schedule? Did it state when it needed to be?
- I just took his word for it and paid him.
- Romero – Many times a contractor assumes when you pay him for a phase, that he is done with the work. You have a right to retain a percentage of that contract until its done. Not enough Texans understands what their rights are. Recommends she pay for the job as you go.
- Collier – What could we do to help you more?
- Some kind of website to see licenses would be helpful
- Wants to see level of outreach to public so that they know what to look for when looking for a contractor, suggests a checklist. The communication is lacking, and people are not informed enough to know they can complain to the BBB.
- Collier – Discusses hosting a registry for contractors who are available for these kind of disaster situations, provide this list to the public. It’s not a guarantee but it would help
Anita Hamilton, Self
- Very similar circumstance to Tangie Louis, other than that her contract was broken into phases
- Her repairs were broken into 4 phases
- Phase 1 – Demolition
- Phase 2 – Cabinets, trim, doors, painting
- Suggested installing can lights, which caused a revised contract
- Started the work, but did not finish the work
- Left without plumbing in the kitchen, tile on the floor without grout
- Baseboards left in a pile
- Was promised level 5 walls, does not have level 5 walls
- Payed him $19,517
- Stickland – Sounds like you got a raw deal. You both seem like very capable people. What can government do to help protect you? I don’t see a registry helping this problem. We might be returning to a buyer beware situation. In many cases, government cannot protect against cases like this.
- Only thing that I can think of is not have general contractors. If you’re going be a contractor, you have to be licensed. Compares general contractors to storm chasers.
- Stickland – Will you feel justified if you go to court and win a judgement?
- The judgement would be fine, I just want him to not be able to attach a lean to my property.
- Stickland- So you feel now the contract you had is being weaponized against you?
- In a sense, yes.
- Collier – If you were going to do research, what agency would you look to?
- I looked on the BBB, no state agency I’m aware of
- Collier – Texas AG has a webpage about contracting information, but people may not know that these resources are available. Another suggestion is to always get a second bid.
- His bid came in lower, so I went with him to save money
- Collier – We have the information, we just haven’t told the public about it yet. We may not be doing a good enough job currently to protect the people.
- Stickland – Discusses using PSA’s immediately after disasters as recovery begins to help protect people against this kind of incident.
Kris Kennedy, Office of the Attorney General
- We have an online complaint system, available on our website
- We conduct outreach post disaster with local entities
- The best consumer protection is widespread awareness of scams and cheats
- We can take enforcement action against businesses that do not respond to our complaints if we believe it’s in the best interest of the Texas people
- Received 3400 complaints in the aftermath of hurricane Harvey
- Believes we will continue to see more complaints in the coming months as people are moving back into their homes
- Collier – sometimes in communities, they only say the AG as handling issues like child support. Suggests creating a checklist to make it easier for the consumer.
- We have 5 regional offices that all try to do outreach on information we get, it extends to the faith community just not on a systemic basis. Mentioned meeting with diocese
- Collier – Maybe go outside the catholic faith base
- Set up a war room in the aftermath of Harvey, thought it was widely effective and points to why we may have seen less complaints
- Oliveira – In terms of price gouging related to hotels, can you tell us what the rates were?
- Failing to charge the weekly rates, and saw price increases of up to 33% to 50% more in the aftermath of the storm
- Oliveira – Do you communicate with the BBB and other groups about your complaint system?
- If we see a spike against one business, we contact local law enforcement and the BBB to find out what they have. Law enforcement especially if people show up, take insurance money, and disappear
- Oliveira – Is there a way we can do an analysis of BBB complaints, complaints that you must do an analysis on these complaints? References hail storm docket after massive hail storm in the valley
- We do have the ability to mine the data that we have, it’s categorized by a complaint analyst
- Oliveira – If you could call the county courts to let them know that some of these complaints could be filed with the smaller courts
- Stickland – How long have you been with the AGs office?
- 10 years
- Stickland – How was the response in this catastrophe relevant to other catastrophes?
- Haven’t worked in the consumer complaints department long enough to answer that
- Workman – Is there any kind of public outreach after these events to tell people not to give all their money to someone?
- No, we had many media requests, but I believe we used other forms of media to advocate self-protection in this field.
- Oliveira – Some contractors add clauses that if a homeowner hires another contractor, then they can keep up to 50% of the original contract. Have you had any complaints like these?
- Not to my knowledge
- Oliveira – the issue that was pointed out regarding contractors getting liens that require payment even though not one minute of work was done
Closing Remarks
- Next meeting will begin tomorrow at 10:00 am