State investigators target scam contractors

SALT LAKE CITY — A probe targeting fraudulent construction activity found that scam contractors are operating in Utah.

The Utah Division of Occupational and Professional Licensing announced Friday the completion a two-week sting operation into alleged construction scams in northern and southern Utah locations.

During the undercover effort, Utah investigators issued 45 citations for unlicensed activity or activity beyond the scope of a license, with fines totaling $23,000.

The state’s covert investigation was in conjunction with a national effort by the National Association of State Contractors Licensing Agencies. Other states participating in the probe included Arizona, California, Florida, Oregon, Rhode Island, Texas and Washington.

“This year’s sting operation targeted northern and southern locations where (our) investigators saw trouble spots of unlicensed activity,” explained Mark Steinagel, director of the Utah Division of Occupational and Professional Licensing. “The division is proud of its achievements in identifying bad actors whose actions harm the public and take away legitimate business from professional licensees.”

Steinagel said investigators used Craigslist, online classifieds and field checks to target scammers selling services that require a professional license.

“A poor, unsuspecting victim … what they don’t know is that (a scam contractor) has 10 people after them, so instead of going to buy materials and completing the project, that individual is paying off other creditors,” he said.

During the investigation, the teams contacted companies and individuals to request bids for business projects using a decoy commercial building as bait, Steinagel explained.

Once bids were reviewed and fraud was discovered, investigators issued citations and fines, and explained the process for licensure with the state to the respondents, he said.

The investigative team also noticed an increase over 2015’s sting with 32 citations and $20,000 in fines issued for unlawful activity.

“We want to get the message out there to use a licensed individual because while they’re not perfect, they are much less likely to defraud you,” Steinagel said. “These are things that most people know, but in the pressure moment of making a decision, they just forget.”

If consumers use licensed contractors and something goes wrong, they are eligible to access the residence lien and recovery fund that licensed contractors are required to pay into, Steinagel said.

“If they use a licensed contractor, have a written contract and have paid the contract in full, they won’t have to pay twice because (the fund) will make them whole,” he explained. “Then we will go after the contractor that defrauded them.”

Steinagel noted that many scammers are “travelers” who set up shop in one place and stay for a short time before moving on and targeting new potential victims. He said the goal of the sting operation was to send a strong message to fraudulent contractors that “they need to do things the right way.”

Investigators also noted that besides elderly victims and people in rural areas, some victims were from “the younger generation.”

“Through social media and other online forums, even some of those who you would think would be more savvy (fell prey),” Steinagel said. “All generations are letting their guard down because of the hot economy and because we’re a little too trusting sometimes.”

Consumers should be wary of any potential red flag that arises when dealing with sketchy contractors, he said.

“Take a little bit of time, (and) if you care about your money and care about getting people who will do the job right, listen to your gut, check the license, and it’s much less likely that you will be a victim,” Steinagel said.

To file a complaint, verify the license of a professional or check on whether a licensee has faced disciplinary action, consumers can visit the Utah Division of Occupational and Professional Licensing website.

Consumer information is also available through the Utah Division of Consumer Protection website.

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Selecting licensed contractors

Internet bulletin boards and online classified ads invite deceptive business opportunities. Steps to avoid fraud when seeking a bid for contracting work include:

• Verify the contractor or business license through the Utah Division of Occupational and Professional Licensing.

• Always hire a licensed contractor so you have the ability to file a complaint if something goes wrong in the business transaction.

• Request at least three written estimates to compare prices.

• Check at least three references with former customers.

• Check with materials suppliers to find out which contractors/companies they would recommend.

• Require a written contract to protect yourself and your property against liens.

• Don’t make a large down payment; pay as work is completed.

• Monitor the job as it progresses.

• Don’t make the final payment until the job is complete per the terms of your contract.

• Keep copies of all paperwork related to your job.

Source: Utah Department of Commerce

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