Sooner or later, no matter how hard you work to run a perfect business, you're going to run into a problem with a client. When that happens, you could be faced with a complaint from your state attorney general, a local attorney, or a consumer affairs agency. Here are things to keep in mind when handling such complaints — and tips for avoiding them:
Do good work. Keeping the customer reasonably happy usually frees you from worrying about complaints.
Make sure your contracts are legal and up to date. The federal government and most states require contractors to use very specific disclosures in their contracts. Have yours reviewed by a lawyer at least once every year.
Respond quickly. Be respectful and respond promptly if you're contacted by a state agency regarding a complaint. These agencies are often easier to deal with than private attorneys, who consumers may turn to if you refuse to deal with the agency.
Perform a cost-benefit analysis of how to deal with each complaint. Fighting a complaint might be less cost effective than simply offering a reasonable refund to the customer. The goal is to ensure that a complaint doesn't turn into a full-blown investigation of your sales or installation practices.
Be wary of pro bono lawyers or “legal clinics” who represent consumers. Such lawyers often have no cost incentive to settle a complaint out of court and may actually consider your case a training ground for their young attorneys. This type of battle can turn into quicksand under your feet.
Consider a more liberal policy of settling complaints if you work in an area with aggressive consumer protection tendencies or high levels of activism (such as Washington, D.C., or California).
Consider the use of dispute resolution language in your contract. Carefully worded mediation or arbitration clauses might allow you to keep a dispute private, avoid class-action problems, and eliminate the risks of running into a jury biased against home improvement contractors. —D.S. Berenson is the Washington, D.C., managing partner of Johanson Berenson LLP (www.johansonberenson.com), a national law firm specializing in the representation of contractors and the home improvement industry. He may be contacted at (703) 759-1055 or firstname.lastname@example.org.
This article is for informational purposes only and should not be construed as legal advice.