AG wants to ban kitchen remodeler from NC
Posted July 14, 2014
Raleigh, N.C. — The state Attorney General's Office filed suit Monday against a Burlington company that authorities accuse of taking upfront payments from customers for kitchen remodeling jobs and then not finishing the work.
The lawsuit seeks to ban American Kitchen Corp. and owners Robert Selfors and Tyler Justin Sheets from offering home repair or home improvement services to North Carolina homeowners and to force them to pay refunds to consumers who paid for work that was never completed.
“Businesses that take your money up front have an obligation to get the job done,” Attorney General Roy Cooper said in a statement. “Using payments from new customers to finance existing jobs is bad business and not sustainable.”
5 on Your Side reported two weeks ago on problems customers were having with American Kitchen.
American Kitchen is now closed, according to Cooper, but up until last month, it required customers to pay deposits of as much as $19,000 on kitchen makeovers before hiring subcontractors to do the work. The lawsuit states that the firm couldn't pay the subcontractors to complete existing jobs without recruiting new customers to pay more advance deposits.
"The business was not unlike a Ponzi scheme and was destined to fail, leaving its newest customers high and dry," the suit states.
The unpaid subcontractors and suppliers have filed liens against several customers’ homes, many of whose kitchen remodeling jobs remain unfinished, he said.
Sheets couldn't be reached for comment Monday. Selfors, who is also the pastor of The Kirk Church in Raleigh, said he wasn't aware of the lawsuit.
"It's not a crime to go out of business and not a crime to try twice in the same business and fail," Selfors said, adding that it's "unfair that people feel they were scammed."
The state Consumer Protection Division has received complaints from 38 homeowners who have lost about $300,000 total to American Kitchen, he said, adding that the company's owners previously ran a company called Kitchen Carolina that operated using the same business model and shut down in a similar manner in 2009.
To avoid problems with home improvement projects, the Consumer Protection Division offers the following tips:
- Avoid paying more than 10 percent of the total cost in advance.
- If you must pay fees in advance, use your credit card if possible in case you need to dispute the charge later.
- Ask to pay as the work is done, or once the work is completed to your satisfaction.
- A contractor who claims to need a lot of money upfront for supplies and materials may have poor credit or be in bad financial shape. If you wish to do business with such a contractor, buy the supplies and materials yourself and pay for the labor once the project is finished.
To report problems with a home improvement company or contractor or to ask questions before hiring one, call the Consumer Protection Division at 1-877-5-NO-SCAM.