Few things make an honest contractor’s blood boil like hearing homeowners’ stories about how they’ve been scammed in the past.
“All of it, just the total thievery and tactics, makes me sick,” said Dave Hutchins, owner and president of Bay Area Air Conditioning, Crystal River, Florida.
While contractors report many tales of fraudulent practices, from black-mold scares to unneeded parts replacements, it’s hard to find solutions to this overall problem. While law enforcement often appears to be uninterested in tracking down HVAC fraud, contractors note one of the most important things a company can do is establish its own reputation for integrity.
Common Scams and Tactics
When asked about the most common scams they see in their regions, HVAC contractors report a variety of scams and fraud.
Most scams start with telemarketing solicitations claiming to offer the lowest cost “because we are in your neighborhood,” said Hutchins. Upon arrival, scammers “claim some component is bad, or it needs more refrigerant than the system holds, or you have toxic mold,” he added.
Martin Hoover, president and owner of Empire Heating and Air Conditioning, Decatur, Georgia, said he often sees scammers offering something too good to be true.
“The current scam seems to be calling people and saying they are with XYZ Heating and Air, and it’s time for your free inspection,” Hoover said. “Then, they go in and try to con people out of money.”
He added there are also the “typical scams of condemning perfectly good equipment or parts and selling unsuspecting folks replacements, like the TV stings you see from time to time.”
Saundra Jones, president of Alpine Air Inc., Jacksonville, Florida, said this occurs frequently in her area.
“The most common scam we see is the homeowner being told he or she needs a replacement when it is something relatively inexpensive and an easy fix,” Jones said. “In most of these cases, it could be as simple as a capacitor, and the homeowner is convinced the repair is expensive, and it is better for them to just replace the system.”
Gary Marowske, president of Flame Heating, Cooling, Plumbing & Electrical, Warren, Michigan, said he frequently hears from homeowners who have been told their heat exchanger is cracked — and the scammer “threatens it will die shortly.”
According to Cheryl Reed, director of external communications for Angie’s List, the well-known online review site has compiled a warning guide for consumers “based on our 20 years of working with service pros and compiling insights from reviews.”
The guide lists the following as the most common warning signs of HVAC scams: the too-good-to-be-true offer, high-pressure sales, verbal-only offers, noncertified or untrained companies, requests for a large amount of money upfront, the bait-and-switch, unlicensed contractors, and parts not being replaced.
“Some contractors may charge for parts they never actually replaced,” Reed said.
To avoid this, Angie’s List recommends homeowners request the contractor hand them the old parts once the replacement process is complete.
She also noted consumers are more vulnerable to scams when they “hire the first HVAC company they find when their furnace or a/c dies.” Angie’s List recommends regular maintenance to avoid this, she said, noting, “We have a report on the trend of maintenance contracts.”
Another tip for consumers is, of course, to get a second opinion from a different HVAC contractor. And, according to many contractors, they frequently try to help consumers avoid scams when called in to offer a second opinion. Unfortunately, many consumers remain vulnerable to scams, yet don’t realize it until it’s too late.
Hutchins noted his company prevents some scams when called in for second opinions, but sees most scams “when it’s too late.”
“We find two to four every week, and not everyone calls or uses us — or even knows when they were taken — so it’s just the tip of the iceberg,” he said.
Marowske said, depending on the time of year, his firm sees five to 20 scams per week.
Recent data from the Federal Trade Commission (FTC) revealed that less than 1 percent of the complaints it catalogued in 2014 fell into the home improvement and repairs category (which includes HVAC contracting scams). The FTC is the nation’s consumer protection agency, and it publishes an annual survey of consumer fraud complaints in the Consumer Sentinel Network Data Book. For 2014, identity theft was the No. 1 consumer complaint, while home improvement and repair ranked 24th out of the 30 total complaint categories.
However, the No. 2 consumer complaint was impostor scams, which includes scammers claiming to be affiliated with a private entity such as a company. And, Hoover noted, he is growing more concerned about scammers who impersonate reputable HVAC companies.
“We had a guy get a cell phone in our company name and try to scam people who called information and asked for Empire Heating and Air in any of the many cities near us,” Hoover said. “He would pretend to be us.”
According to Hoover, this particular situation has proven very difficult to resolve.
“Law enforcement seems to have no interest in catching these guys, as they have bigger concerns,” he said, adding he’s also not received any help from the phone company’s fraud unit. However, he did note some websites, including Manta, Yelp, and Merchant Circle, have been responsive and removed the scammer’s fraudulent listing.
“A few times a year, a customer will call and say, ‘You sent a guy and this just doesn’t seem like how your company operates,’” Hoover said. “And we’ve gotten to the bottom of it before much damage was done, but I’m sure there are at least as many people who’ve been scammed that we never hear from.”
Hoover and Marowske also said scams are nondiscriminatory, and any trusting consumer can become a victim.
However, down in Florida, Hutchins and Jackson said the majority of victims they see are elderly.
“The vast majority are elderly, so, if you have parents living in Florida, you need to warn them,” Hutchins said, adding some predators pounce on elderly singles within weeks of the publication of their spouse’s obituary.
And, unfortunately, Hutchins said, “Our government has no interest in pursuing these crimes — none whatsoever.”
“Demographically, I believe the elderly are targeted far more than others,” Jones said. However, she said it is becoming more and more difficult for the person running the scam, as this age group is becoming more and more familiar with what to look for when hiring the contractor. “The Internet is a powerful tool when checking reputable sites for online reviews, ratings, and history.”
While law enforcement may be lacking, and contractors may feel disheartened by the unethical practices they frequently see, the essential thing to remember is each company must set and enforce its own ethics and build its own reputation.
Yet, no matter what a company owner or president says, it’s the technicians and salespeople on the ground who interact with the public. So, how do contractors ensure their ethical codes are being followed by all employees?
“It’s important to share your company values and mission with all your personnel,” Jones noted. “This includes a series of questions during an interview for a new hire. Many of them have been instructed to upsell and are promised a commission-based sale. It is nearly impossible to convert someone in the industry who has grown comfortable with this arrangement.”
Hutchins added he also believes strongly in hourly pay, not commission or ticket percentage for service technicians’ repairs.
“If your techs do sell replacements and get a spiff or small percent of the sale — and ours do — keep a watchful eye on the age and condition of the equipment that comes back to the shop,” he advised.
Marowske added contractors have to live by their morals and core values and should only hire those who match ethically.
Hoover said his company simply has a zero-tolerance policy for dishonestly. He also believes satisfaction surveys are important to hear a client’s perception on how well the technician performed on the job.
“All our trucks are lettered, employees uniformed, and we always call from the office before dispatching technicians,” he said. “We monitor everything possible with GPS tracking, proper pricing, and presentation structure.”
Plus, he said, once the standard has been set, “Following through on dismissal for aberrant behavior also drives the point home.”
SIDEBAR: Overly Cautious Customers
When customers have previously been the victim of a scam, they’re likely to be much more suspicious during future interactions with HVAC contractors. Here’s some great advice from contractors on working with people who have been burned in the past.
“These folks are understandably cautious. Follow procedure and make sure they know everything in advance and put it in writing.”
Empire Heating and Air Conditioning
“Be as open and transparent as possible. Show them certificates of insurances and licenses.”
Flame Heating, Cooling, Plumbing & Electrical
“Once you let them know they were taken, you have earned their trust.”
Bay Area Air Conditioning
Crystal River, Florida
“It’s important to listen. They do not want to feel rushed during the initial conversation. They need a sympathetic ear when they’re trying to discuss their past experiences. … This type of call does take longer than a normal dispatch, but, to ensure your own reputation as an honorable HVAC company, take the time to listen to the person in his or her time of need.”
Alpine Air Inc.
Publication date: 4/6/2015