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• 05/02/2008

CSLB Press Release - 05/02/2008

Contractors State License Board Targets Phony Contractors in Elk Grove Undercover Sting

18 arrested, four go to jail, five vehicles towed during daylong operation

SACRAMENTO — A total of 18 people were arrested on Wednesday, April 30, 2008, during an undercover sting operation conducted by the Contractors State License Board (CSLB), in cooperation with the Elk Grove Police Department.

Members of CSLB's Statewide Investigative Fraud Team (SWIFT) posed as homeowners at a sting house and invited suspected unlicensed operators to bid on projects including landscaping, plumbing, fencing, concrete, and painting. The suspects were identified through ads in newspapers and online, as well as from leads provided by licensed contractors.

When suspects bid more than $500 for a job, they were arrested and given a Notice to Appear (NTA) in Sacramento County Superior Court to answer misdemeanor charges for violations of the Business & Professions (B&P) Code. California law requires a state contractor's license for home improvement jobs that total $500 or more in labor and materials.

Fifteen suspects received NTA's; 11 of them for both contracting without a license (B&P 7028 (a)) and illegal advertising (B&P 7027.1). Two were only charged with B&P 7028 (a). Two others will only face a B&P 7027.1 charge. They are scheduled to appear in Sacramento Superior Court on July 9, 2008. One suspect was taken to jail for having a no bail arrest warrant for driving under the influence. Before another suspect could be given an NTA, he was taken to jail for resisting arrest (Penal Code 148). The other two who were taken to jail were employees of people who were giving a bid. Five vehicles were towed during the day, as offenders were either driving without a driver license or were driving on a suspended license.

Unlicensed operators are part of a huge underground economy that may not be such a bargain for the homeowners who use them. "Unlicensed operators will often underbid legitimate contractors," said CSLB Registrar Steve Sands. "It is not unusual for these individuals to have other run-ins with the law and not be qualified to do the work they are hired for. Homeowners may end up paying twice for a job when they have to hire a qualified professional to fix the problem."

Homeowners seldom realize the risks they take when hiring illegal operators. Phony contractors rarely have workers' compensation or liability insurance. A worker who is hurt on the job could seek medical reimbursement or other damages from the homeowner. And homeowners have little recourse for poor quality workmanship or financial damages when they use a person who is operating outside of the law. "Some unlicensed operators deliberately target trusting and vulnerable people," added Registrar Sands. "They can take your money and be gone before you realize what has happened."

The CSLB urges consumers to follow these tips when hiring a contractor:

• Be especially hesitant when approached by someone offering home improvement services door-to-door.
• Verify the contractor's license by checking online at www.cslb.ca.gov, or via CSLB's automated phone service at 1-800-321-CSLB (2752).
• Make sure all workers are covered by workers' compensation insurance.
• Don't pay more than 10% down or $1,000, whichever is less.
• Don't pay cash, and don't let the payments get ahead of the work.
• Check references; get three bids and a written contract.
• Contact the CSLB if you have a complaint against a contractor.

Unlicensed operator suspects cited for unlicensed activity and/or illegal advertising:

The Contractors State License Board operates under the umbrella of the California Department of Consumer Affairs. More information and publications about hiring contractors is available on the CSLB Website or by calling 800-321-CSLB (2752). The CSLB licenses and regulates California's 315,000 contractors, and investigates more than 20,000 complaints against contractors annually. In fiscal year 2006-07, the CSLB obtained nearly $45 million in ordered restitution for consumers. The CSLB is also a partner in Governor Schwarzenegger's Economic and Employment Enforcement Coalition, a multi-agency group focused on enforcing the state's labor laws and regulations.