COMMERCE-Week of April 9th

SF 466 – Residential construction contracts

FLOOR ACTION:

SF 466 is designed to protect consumers and reputable business owners from unscrupulous residential exterior repair contractors, known as “storm chasers.” These “storm chasers”  typically travel from state to state following natural catastrophes, including severe wind and hail storms, floods and tornadoes that produce widespread property damages. The scammers then swoop in on towns and cities to take advantage of citizens by using high-pressure tactics, false promises and bogus endorsements, and often “advise” consumers as to what insurance policies “should” pay for exterior repairs. The bill bans these contractors from offering customers “rebates” on their insurance deductibles, or acting as adjustors or intermediaries between the customer and the insurance company. The bill passed the Senate and was amended by the House in 2011. The Attorney General’s Consumer Protection Division supported the Senate version, but maintained that the House amendment made homeowners more vulnerable to consumer fraud by contractors and strengthened the legal arguments of contractors who make oral promises to homeowners regarding financial liability. Consumers typically rely on what they are told face-to-face, then have difficulty proving oral misrepresentations. The Senate amended the House amendment to include recommendations by the Consumer Protection Division to strengthen penalties for violations and reinforce the current rights of Iowans under the Iowa Consumer Fraud Act. SF 466 now goes back to the House for further consideration. [4/11: 47-2 (Sorenson, Zaun “no”)]