Reminds Californians that price gouging restrictions remain in effect.
OAKLAND – California Attorney General Rob Bonta today issued a consumer alert warning Californians to beware of fake and unlicensed contractors soliciting their services to Californians affected by damage from the recent winter storms. In today’s alert, Attorney General Bonta urges Californians to take precautions by hiring only licensed contractors and reminds businesses that price gouging during a state of emergency is illegal under Penal Code Section 396. As noted by the Contractors State License Board (CSLB), anyone who contracts for work in a state or federal natural disaster area without an active state contractor license may be subject to felony charges.
“As Californians recover from the devastating storms, the last thing they should worry about is being scammed by bad actors,” said Attorney General Bonta. “We will not tolerate those who take advantage of consumers during this time of struggle for many. I urge all Californians to be diligent and do their research before making any kind of home repair through a contractor. Additionally, if you believe you have been a victim of price gouging, report it to your local authorities or to my office at oag.ca.gov/report.”
“Disaster survivors take a huge risk when they hire unlicensed contractors,” said CSLB Registrar David Fogt. “Most are not properly insured and likely don’t have the skills or knowledge to perform the work. It is important to verify on CSLB’s website the person you are working with is included on CSLB’s license records.”
Don’t Fall Victim to Unlicensed Contractors
The California Department of Justice works closely with the Contractors State License Board (CSLB) to ensure residents do not fall victim to unlicensed home reparation and reconstruction services. As a reminder, CSLB encourages everyone to check all contractors’ license numbers on the CSLB website and check each contractor’s pocket license to confirm the listed personnel on the license. Complaints against contractors for unlicensed practices and other violations of contractor’s license law can be filed online.
Additional tips and recommendations from CSLB:
- Don’t rush into repairs or cleanup, no matter how badly they’re needed.
- Don’t sign over any payment checks from your insurance company.
- Hire only California-licensed contractors. Ask to see the license. The license number must be on all ads, contracts, and business cards.
- Don’t pay more than 10 percent down or $1,000 — whichever is less.
- Don’t pay cash, and don’t let the payments get ahead of the work. Only pay for work as it is completed to your satisfaction.
- Avoid making the final payment until you’re satisfied with the job.
Price Gouging Laws Remain in Effect
California law generally prohibits charging a price that exceeds, by more than 10%, the price of an item before a state or local declaration of emergency. For any item a seller only began selling after an emergency declaration, the law generally prohibits charging a price that exceeds the seller’s cost of the item by more than 50%. This law applies to those who sell food, emergency supplies, medical supplies, building materials, and gasoline. The law also applies to repair or reconstruction services, emergency cleanup services, certain transportation services, freight and storage services, hotel accommodations, and rental housing. Exceptions to this prohibition exist if, for example, the price of labor, goods, or materials has increased for the business.
Violators of the price gouging statute are subject to criminal prosecution that can result in a one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties of up to $2,500 per violation, injunctive relief, and mandatory restitution. The Attorney General and local district attorneys can enforce the statute.
For additional information on price gouging, please see oag.ca.gov/consumers/pricegougingduringdisasters.