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Florida Wins Refunds for Hurricane Ivan Homeowners

January 6, 2006
The state of Florida has reached an agreement with a Houston-based company that settles allegations of fraudulent business practices, including price gouging, following Hurricane Ivan in 2004.

The settlement with Quality Plus Restoration, a water extraction firm, will remove liens from homeowners' property, provide restitution through their insurance companies and pay $50,000 to the State to cover costs of the investigation, Attorney General Charlie Crist said.

The investigation into Quality's business practices was prompted by consumer complaints filed with the attorney general's office. Investigators discovered 42 notices of lien filed by Quality Plus against North Florida homeowners for water extraction work.

The liens were fraudulent and violated Quality's contracts, which called for the firm to only bill the consumer's insurance company. The settlement requires Quality to remove all liens for the 42 homeowners and reimburse for any overcharges paid by consumers.

"Florida law protects property owners from unwarranted claims on their most important possession," said Crist. "The law also protects against overcharging during times of emergency. This settlement is a positive result for storm victims, many of whom are still trying to rebuild their homes and their lives."

In addition to removing the liens, allegations of price gouging were also resolved.

Under the settlement, Quality agreed to eliminate an "emergency service" charge of $125 imposed on the grounds that a Texas-based company would not perform routine service calls in Florida.

The settlement also requires Quality to reduce its charge from $550 to $250 for the use of an infra-red camera to detect moisture, the average cost of such a service. Finally, it settlement reduces an overhead surcharge from 35% of the final bill to 20%.

All invoices were changed to reflect these prices and any invoices paid prior to the agreement will be adjusted and the difference remitted to the consumer.

North Florida homeowner Tim Reeves was one of the consumers who received a notice of lien on his property.

After Hurricane Ivan, Reeves signed a contract with Quality Plus for water extraction work on his house. He received an estimate of $3,000 to $4,000, but never received a bill until after he was notified of the lien on his home.

When he did receive the bill, it was for $15,000, substantially higher than the prior estimate. The company has since cancelled the lien and adjusted Reeves's charges.

During the past two hurricane seasons, the Attorney General's Office received more than 14,000 complaints through its price gouging hotline. The office initiated 72 formal investigations and filed 15 price gouging lawsuits against hotels, generator businesses, tree removal companies and other businesses.

Including the Quality Plus settlement, to date, the Attorney General's Office has recovered more than $989,000 in restitution for Florida consumers from price gouging settlements and other resolutions. Other investigations and settlement negotiations continue.

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