Texas Attorney General Greg Abbott recently charged an Austin-based construction contractor with deceiving Texas homeowners and falsely representing available funding sources for home repairs and restoration.
The state’s enforcement action names Castro Property Restoration, its owner Victor James Castro and his business associate Allen Lloyd Kinman (aka Jonathan Allen and Ziggy Allen) as defendants. According to court documents, the defendants solicit door-to-door, offering to assist homeowners with home improvement services.
The defendants allegedly misrepresent to homeowners that “free money” is available from the government to pay for home repair work and then requires homeowners to sign a contract and pay a $99 “administrative fee” in advance.
However, the defendants failed to disclose to homeowners that the contract contained a “power of attorney” clause that gave the defendants control over financial decisions regarding the homeowner’s home. Because the “free government money” claim was false, the only available source of funding was from the homeowners’ insurance policy. The broad power of attorney clause gives the defendants the authority to file a claim against the homeowner’s insurance policy directly.
State investigators also found the defendants failed to clearly communicate that homeowners had a right to cancel the transaction within three days of signing the contract. According to court documents, when one homeowner expressed interest in canceling her contract, the two company representatives told the homeowner that canceling the contract might constitute insurance fraud and that she might be arrested.
The Office of the Attorney General charged the defendants with violating multiple provisions of the Texas Deceptive Trade Practices Act and Texas Business Code. The State seeks a temporary and permanent injunction, civil penalties and restitution for affected customers.
Check the Attorney General’s lawsuit for more details.