New regulatory unit aimed at shady contractors

Posted: July 21, 2014

His answers were lies.

The form asked if he'd ever been convicted of fraud, theft, or deception. Did he commit crimes as a home-improvement contractor? Were civil judgments filed against him? Bucks County roofer Steve Dunner wrote "no" to each question on the Pennsylvania contractor registration form.

He failed to mention a theft conviction for stealing a Holland couple's $900 down payment the year before. And he forgot a long list of civil judgements throughout the 2000s, including the $20,000 business loan he didn't pay back. The form also lacked his $13,000 theft conviction from the 1990s.

The state nonetheless renewed Dunner's contractor registration in May 2012. And the questionnaire he filled out was displayed on the state attorney general's website, even after he was convicted a second time for bilking customers that July and a judge revoked his registration.

In the five years since Pennsylvania's Home Improvement Consumer Protection Act took effect, some fraudulent contractors have been able to skirt the law's registration provisions, lying on state forms with little retribution.

The AG's office said last week that it has the resources to conduct only "spot audits" on Pennsylvania's roughly 65,000 contractors, the vast majority of whom are honest. But officials said the AG is currently reorganizing efforts to enforce the law.

Contractors will now be under the purview of the new Regulatory Compliance Unit, which is adding attorneys and agents to the team that audits contractor registrations and investigates complaints.

"We would love to be able to investigate every single complaint that comes in," said Basil Merenda, chief deputy of the AG's Bureau of Consumer Protection. "But like everything else, we have to prioritize."

Lawmakers passed the Home Improvement Consumer Protection Act in 2008, in part, to create broader oversight over contractors by using state registration. Before that, they were licensed by municipalities, which allowed the fraudulent ones to take their business to another town if they lost registration.

"The [2008] law has helped us tremendously in being able to find them," said Michael Bannon, director of Bucks County's Department of Consumer Protection. "Before, sometimes all we knew was that it was a guy in a white pickup truck with silver hair who took off with $5,000."

But state registration has had unintended consequences, according to Evelyn Yancoskie, director of Delaware County's Office of Consumer Affairs. Stripping a fraudulent contractor of his license requires an investigation by the AG's office or a county prosecutor who often must prove a pattern of fraud.

"The local code enforcement officer used to have the power to take the legal action they wanted to take," Yancoskie said. "To get the AG to come out and investigate is very rare."

The law has other limitations. Contractors only have to renew their registration every two years, even if they have accrued convictions or civil judgements in that time. And the AG lacks the power to deny a registration based on a contractor's criminal background or court judgments. Only a judge can do that.

Fran Cleaver, an aide to the contractor law's author, State Sen. Robert "Tommy" Tomlinson (R., Bucks), said she would meet with the AG's office in the coming weeks to discuss areas of the act that need improvement.

In the meantime, Alan J. Garabedian, a deputy district attorney in Bucks County, said consumers could best protect themselves by looking up a contractor's criminal and civil court history on their own.

Besides Dunner, Garabedian cited two other Bucks County contractors who have skirted the law's registration requirements. Lower Makefield contractor John Succi, who is facing charges of $2.5 million in contractor fraud, allegedly changed his date of birth on the state forms to get a new contractor number and appear honest on the AG's website.

And John Salvatico of Doylestown operated his company under his wife's name after a 2008 fraud conviction. He was convicted again this year after he failed to build a deck in Lower Southampton.

Dunner, the roofer, is on the lam after skipping bail earlier this year to avoid a state prison sentence of two to 10 years. As of Friday, the AG's website said his registration lapsed in May, even though a Bucks County judge revoked it last year.

The questionnaire Dunner filled out remains online, claiming a past without convictions or lawsuits.

"You can't blame people for being ripped off by fraudsters," Garabedian said. "But if they want to be sure, they have to look them up themselves."

610-313-8118 @Ben_Finley

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