Greg Abbott charges property restoration company with deceiving Texas homeowners

Tuesday, February 25, 2014 - 1:08pm

Austin, Texas (KETK) Texas Attorney General Greg Abbott today charged an Austin-based residential construction contractor with deceiving Texas homeowners and misrepresenting funding sources available to pay for home repairs and restoration.

Castro Property Restoration, its owner Victor James Castro and his business associate Allen Lloyd Kinman are named in the States enforcement action as defendants. According to court documents, the defendants solicit business door-to-door, offering to assist homeowners with home improvement services. The defendants misrepresent to homeowners that free money from the government is available to pay for the home repair work and then require homeowners to sign a contract and pay a $99 administrative fee to the defendants in advance to complete the repairs.

The States investigation revealed, however, that 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 homeowners home. Because the free government money claim was false, the only funding source the defendants could obtain was from the homeowners insurance policy and the defendants could file a claim against the homeowners insurance policy by relying on the contracts broad power of attorney clause.

State investigators also found that the defendants failed to clearly communicate homeowners right to cancel the transaction within three days of signing the contract. Court documents state that when one homeowner expressed interest in canceling her contract, the defendants sent two representatives to the homeowners home who told her that canceling the contract might constitute insurance fraud and that she might be arrested for it.

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 is seeking a temporary and permanent injunction, civil penalties and restitution for affected customers.

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Greg Abbott charges property restoration company with deceiving Texas homeowners