Attorney General Lisa Madigan announced Jan. 7 a nearly $1 million settlement with a Downers Grove-based home improvement business for deceiving hundreds of residents into paying for home repair work they did not realize they agreed to and may not have wanted, according to a news release from the Illinois Attorney General’s Office.
Madigan entered the settlement in Cook County Circuit Court with American Dream Home Improvement Inc. (ADHI) to resolve allegations that the company deceived homeowners into hiring ADHI to do roof and home repairs following storms. The settlement will provide restitution to Illinois consumers who have filed complaints with Madigan’s office or who file a complaint with the office by April 8, 2019, the release stated.
Madigan sued ADHI in 2017 alleging ADHI sales representatives went door-to-door, usually following severe weather, offering free property inspections, home repair services and public adjusting services. In the lawsuit, Madigan alleged that ADHI’s salespeople frequently pressured homeowners into signing forms to authorize free damage inspections when ADHI actually intended to enforce the documents as contracts for home repair work, according to the release.
Madigan’s lawsuit alleged that ADHI’s forms were misleading, contained contradictory information and did not include required disclosures such as the work to be performed, parts and materials, total cost or charges, the start or completion dates and a notice of cancellation as required by state law.
Many homeowners also were unaware that the forms included language leaving them responsible for paying additional costs above what their insurance would cover. Many people were unaware of the details of the forms they had signed, or that ADHI would begin work without homeowners’ consent, according to Madigan. In addition, the lawsuit alleged that residents who proceeded with the home repairs later contacted Madigan’s office to report shoddy or incomplete work, the release stated.
“For too many homeowners in search of property inspections and home repair services after storms, working with American Dream was nothing but a nightmare,” Madigan said in the news release. “This settlement will provide restitution to people who were scammed by American Dream’s deceptive and aggressive sales tactics.”
Under the settlement, ADHI must pay into a restitution fund that Madigan’s office will distribute to homeowners that file complaints with her Consumer Fraud Bureau and who qualify for relief. The settlement also provides for restitution to consumers who have already filed complaints with Madigan’s office, and prohibits ADHI from collecting money from consumers who filed complaints with Madigan’s office.
ADHI denies the allegations in the lawsuit.
"To be clear, although ADHI denies the allegations in the lawsuit, the company took those allegations very seriously right from the start, and with appropriate input from our suppliers while also considering feedback from our valued customers, we quickly made concrete improvements to our processes and our compliance systems," the company said in a statement.
"Additionally, long before this settlement was announced we had already enhanced our training, revised our code of ethics, and we have placed accountability and transparency at the center of all that we do at ADHI—from our leadership to our sales teams to our contractors," the statement said.
“We made the decision to cooperate with the Illinois Attorney General’s office right after we learned the office filed a lawsuit late last year, so that we could continue to move forward and refocus our energy on what we do best—providing homeowners the superior customer service and quality craftsmanship they’ve come to expect from ADHI. As the settlement reflects, ADHI cooperated throughout the process and there also was no admission of any wrongdoing," according to the statement.
The settlement also prohibits ADHI from engaging in the following deceptive business practices:
Leading homeowners to believe they are authorizing a free home inspection, when they are really signing a contract;
• Leading homeowners to believe it is a licensed public adjuster when it is not;
• Failing to ensure contracts include prices, start dates, materials, and a summary of work to be completed;
• Failing to inform residents they have right to cancel a contract within three business days;
• Failing to make repairs when the completed work fails inspection;
• Failing to inform homeowners whether additional charges are needed to bring the properties up to local building codes;
• Charging consumers for work it has not completed and has no intention of completing; and
• Engaging in harassing collection activities at the consumers’ homes.