Beware of the unlicensed contractor

AUSTIN (KXAN) - Unlicensed electricians and air conditioning contractors going after your business. And now, as hundreds of homes need to be rebuilt from the wildfires that devastated Bastrop and parts of Austin's Steiner Ranch neighborhood, it’s getting even worse.

The problem, and it’s a big one according to state regulators, is that many contractors posing as electricians and air conditioning specialists are not properly licensed.

And that can lead to big trouble, especially as insurance companies are putting tens of thousands of dollars into the hands of homeowners looking to rebuild.

“There's a lot of them out there. You'll see the ad like handyman services, all the little fix-it things,” said Randy Pederson of ABC Home and Commercial Services.

Pederson is an Operations Manager and said homeowners need to be careful when hiring contractors for electrical or air conditioning work. Investigators of the Texas Department of Licensing and Regulation agree.

“We want to make sure the citizens are protected,” said William Kuntz, the agency's executive director.

Kuntz gave KXAN a front-row seat on the TDLR’s latest sting operation to catch unlicensed contractor.

The agency recently set-up a “bait house” in an old warehouse in South Austin. Investigators suspected unlicensed contractors were illegally soliciting business.

After they set-up the bait house, they responded to contractors’ advertisements online and in community newspapers. The response was overwhelming.

“It’s typical in what we see because people are taking short cuts to go out and make a buck,” Kuntz said.

KXAN's cameras caught a licensed journeyman, who according to state regulators, does not have an electrical contractor’s license.

State unvestigators go undercover

The journeyman electrician put in his bid for the job, asking for 85 percent of the money before the work would be complete.

“I need 50 percent down, 35 percent after the roughin’ and then the last 15 percent after I finish,” he told undercover investigators.

Investigators said his invoice did not have a company name on it, no phone number and no contractor’s license number. All of those are required by law.

A licensed journeyman does have some experience with electrical work, but the state says he is not qualified to do any work without a master electrician overseeing his work.

And he must have a contractor’s license.

Kuntz puts it like this: “A little bit of knowledge can be very dangerous.”

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It is easy to find out if a repairman has a valid contractor’s license. The Texas Department of Licensing and Regulation website has a page where you simply enter a name and get information. You can also get a lot more information about licensed contract work on the agency's home page.

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• State-issued citation to someone without an electrician's license
   

Dangerous because if you have work done on your home by an unlicensed contractor, and something goes wrong, your insurance company may not cover your damages because of the unlicensed work.

Other unlicensed contractors kept coming to the bait house to place their bids. Each had a different story.

“I installed all the Williamson County jail features of security, all their CCT cameras and all that stuff,” one repairman told the investigator.

The investigator told KXAN the man later admitted to being part of a larger, licensed crew when that work was done.

Other repairmen simply admitted they were trying to cut costs. An undercover investigator tells KXAN, “Some of them will just come right out and say, look if you go through a licensed electrician it’s going to cost you anywhere from five to six hundred dollars more.”

True, when our cameras recorded a man who admitted he was using someone else’s license, saying “I do contract work here but I'm using his license... I can probably run a little electrical, you know, I'm gonna provide everything for about 34-hundred dollars, everything will be included. you don’t want no permits, nothing.”

And TDLR investigators say, if a contractor does not have a proper license, odds are, he does not have insurance. And as a consumer, you would have no recourse if the job was not finished, done poorly or something went wrong. “There is value in knowing that you've got a trained, competent, insured individual and you have a recourse,” said Pederson.

ABC Home and Commercial Services gave KXAN a tour of its business and showed how respectable companies operate. First, they must have their license number displayed on both sides of their company vehicle.

Look for proper authentication

They must also have the name of their company displayed. Invoices must have a name, license, address and phone number on it. And most importantly, the contractor should have no problem showing you his state-issued contractors license if you ask for it. And you should.

The Texas Department of Licensing and Regulation is in the process of sending “cease and desist” letters to 31 alleged violators of their sting operation.

The agency is also sending notices of alleged violations, which can carry a fine up to $5,000. But the state agency said that investigators will work with the unlicensed contractor to try and get them licensed, and on the right path.

“We want the people to be licensed, because somebody who's licensed, we know will have the insurance will have the knowledge and the public will be protected,” Kuntz said.