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CA Settles Home Repair Suit for $3 M

Tuesday, March 31, 2009

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Home repair companies operated by SRVS Charge Inc. (SRVS) will pay $3 million in fines and restitution to settle a business-practices lawsuit brought by the state of California—the largest enforcement judgment in the 80-year history of the state’s Contractors State License Board.

A months-long investigation by the License Board found that SRVS and its affiliated companies had been cheating some 6,000 customers each year for overpriced and substandard home repair work since 1989.

Companies operated by SRVS engaged in a massive scheme to defraud thousands of California consumers out of millions of dollars by charging exorbitant fees for substandard electrical, plumbing and heating/air conditioning repair services that were not performed by qualified, licensed individuals.

“Anyone who believes they may have been ripped off by these companies should contact CSLB as soon as possible,” said CSLB Registrar Steve Sands.  “We’re ready to help consumers who have been harmed with the process of getting some of their money back.”

The suit named SRVS Charge Inc. and its affiliates as well as principal owner Sarkis Terabelian, 43; general manager Zohrab “Rob” Mkhitarian, 40; and seven associates, all of the Los Angeles area.

The defendants operated various service and repair companies that employed technicians in Southern California, the San Francisco Bay Area, and the Sacramento region.  These companies routinely targeted elderly Californians.

SRVS’s scheme worked like this: 

• The company bought millions of dollars in telephone directory advertising. The ads, listing different company names, claimed a 100% satisfaction guarantee and senior discounts.  When customers called any of the numbers listed, they were directed to a central call center.

• Many times, workers would be dispatched from a different company than the customer called. Often, these workers had not undergone mandatory criminal background checks.

• Customers were charged high prices for emergency home service and repair, often unrelated to the actual home repair work.  Much of the work was poorly done or never completed. If a customer was unable to pay, the company would file a lien against the home.

Over several years, CSLB and the Attorney General shut down affiliates of SRVS.  But the defendants continued to operate under a labyrinth of business names and fraudulent contractor license numbers that were interchangeable.  When CSLB either revoked a license or received an excessive number of complaints, the company would establish a new corporate identity, and business continued without interruption.

For more information, see http://ag.ca.gov/newsalerts/release.php?id=1706.

   

Tagged categories: Contractors; Contractors State License Board; Licensing; Residential

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