Home Improvement Business Trust Fund

Online comments: 21

• Kevin Herron

  No Commet .

  Comment added March 17, 2025 7:36pm

• Susan Kassapian, former Asst. Commissioner and General Counsel, Special Counsel, and Principal Administrative Law Judge at DCA and former Deputy Commissioner at OATH

  While the new proposed changes to the Home Improvement Business Trust Fund (TF) rule sound good on paper, the implied benefits are mostly illusory unless DCWP resumes individual consumer restitution hearings for victims of unscrupulous Home Improvement Contractors (HICs). In fact, DCWP has provided no protection for apartment owners or homeowners since they no longer draft such hearings, which should be heard at the Office of Administrative Trials and Hearings (OATH). Without hearings, HICs are not held accountable for the damages they cause to consumers or the laws they violate. This all happened because OATH did not want to hear pro se cases when jurisdiction to hear these cases was transferred to them in August of 2016. OATH insisted that DCWP assign attorneys to each consumer. After about a year, DCWP stopped drafting hearings unless the consumer first obtained a court judgment and the TF kept growing while barely making any payments to consumers.
  With the proposed changes, the TF will just keep paying damages caused by bad contractors, without consequences to them. The city will also never collect fines for their violations of laws. The way the original TF rule worked was that restitution and fines could only be paid from the TF after a hearing and after a license suspension or revocation. As one of the people who helped draft the original TF rule in 1991, paying out damages for HICs and letting them off the hook was NOT what was envisioned. At the very least no contractor on whose behalf the TF has paid out damages should be allowed to be exempt from continued bi-annual contributions. Even then, unless hearings are resumed and charges brought, bad contractors will have impunity to just keep ripping off more consumers.
  Very Few Will Be Eligible for the $40K “Standard” Invasion Process
  Raising the limit of monies that can be paid to consumers from the “standard trust fund invasion process” (from $25,000 to $40,000) is particularly illusory because without hearings virtually no consumers succeed in obtaining court judgments in excess of the small claims court amount of $10,000. To even refer to this route as the “standard” process is a farce since the very first listed way for this happen is via “administrative hearing decisions,” an unachievable result, since hearings are not happening! Those hearings were the standard from 1979 until 2017. Now a consumer would have to obtain a Civil or Supreme court judgment to be eligible for this route, a path most consumers cannot afford to pursue. I know of several consumers who paid lawyers ten thousand dollars or more to pursue damages of more than $100,000 only to give up and abandon their court cases because of a lack of funds. At best, a consumer might be eligible for $20K through the claims process but that too is unlikely. Read on.
  Most Claims Submitted Via the “Claims Process” are Denied By DCWP
  While it is welcome news that DCWP wants to raise the Consumer Claims Process invasion amount to $20,000, the fact is that DCWP has not been doing a good job of granting these claims. Based on a series of FOIL requests and replies received to date, 1,593 consumers who had previously filed complaints since January 1, 2016 were sent claim letters inviting them to file claims. All of these consumers had previously been denied hearings and told to sue in court. There were then an additional 83 consumer complainants who were sent claim letters as of November 22, 2024. Of the 1,676 consumers sent claim letters, only 313 filed claims and of those only 125 were approved for TF invasions for a little more than a total of $1.2M. The majority of the claims — 186 — were denied. Notably, of the 90 consumers that received the current cap of $10K, at least half of them appear to have been damaged far in excess of $20K including several who appear to have suffered six figure damages. For these most seriously aggrieved consumers, even $20K is insufficient. It would require hearings for them to be eligible for the proposed $40K TF invasions. They could also then have their administrative decisions converted to court judgments which could yield further satisfaction.
  The large numbers of claims denied make no sense. DCWP’s Consumer Services rigorously requires an extensive checklist of things to show that a claim has validity before it is docketed as a complaint. Once that gauntlet is passed there should be no reason that so many claims are rejected. I was handling these cases for over 28 years and virtually all cases docketed and which went to hearing were deemed valid. The extremely high denial rate is likely due to either not enough time and resources being put into their review or the need for the consumer to present their case in person instead of in writing. Everyone but the highly literate and highly educated are disadvantaged by this claims process and the denial of hearings.
  Hiding That The TF is Being Mismanaged and Not Being Used As Intended
  This is at least the third time DCWP has amended this rule since 2022. Curiously as part of the explanation for having to amend this rule again, DCWP cites the TF balance as of November 2023 as being $15M and says it wants to be able to go back and cover complaints submitted in 2015. Several of the 2015 complaints actually went to hearings at OATH before the hearings stopped and given the passage of time only a few consumers at best, who were not afforded hearings, will likely file claims. Again, this is illusory. Also, DCWP knew back when it passed the limited TF invasion rule in 2023 that the TF balance had enough money to pay claims related to complaints submitted in 2015. Plus, one has to wonder why DCWP failed to cite the current TF balance as of the end of February 2025 since that was when HIC licenses were renewed and about $2M would have been added to the balance. (I have a pending FOIL seeking this information.)
  I suspect that there is a different reason these changes to the TF rule are being made now. Since the most significant real change here is to pause future TF bi-annual contributions on license renewals, DCWP will make it less noticeable that the TF is still being mismanaged and not being used as intended. Apparently, it will do anything instead of the right thing — to resume hearings — to make the TF balance decrease. DCWP was put on the spot about the TF with the article that came out in The Gothamist on November 24, 2023, and the New York Law Journal article I had written on July 23, 2024. See https://gothamist.com/news/nycs-15m-consumer-protection-fund-is-going-unused-as-homeowners-clamor-for-help and https://www.law.com/newyorklawjournal/2024/07/23/defrauded-consumers-harmed-by-two-new-york-city-agencies-that-are-not-doing-their-jobs/.
  Bottom line: Without resuming hearings most consumers will be unable to be eligible for either the $40K TF invasion because that would require a court judgment, or the $20K TF invasion through the claims process because of the extremely high rate of denial of those claims. The vast majority of HIC victims will continue to get absolutely nothing, while the TF balance will likely continue to be at least $15M for many years to come. This is not only because what has already been explained but because there are always new companies applying for an HIC license for the first time who will be contributing to the fund. More importantly, the general public will continue to be exposed to the HICs who have already ripped off consumers and who can continue to do so without any accountability. With this rule’s proposal to not require them to continue contributing into the TF, we are giving bad HICs an unconscionable gift upon an already unconscionable gift of not being subject to hearings. Talk about government waste and inefficiency!
  Susan Kassapian, former Assistant Commissioner and General Counsel, Special Counsel, and Principal Administrative Law Judge at what was then known as the Department of Consumer Affairs and Deputy Commissioner at the Office of Administrative Trials and Hearings
  Submitted on April 2, 2025

  Comment attachment
  Comments-to-HIC-TF-Amendments-Proposed-March-2025-1.pdf

  Comment added April 2, 2025 6:03pm

• barbara turkewitz

  Barbara Turkewitz Comments
  DCWP proposed rule – Home Improvement Contractor Trust Fund

  The Department of Consumer Affairs and Worker Protection (DCWP) is again revising its rules for Home Improvement Businesses. Again, they are trying to rid themselves of the enormous amount of cash that has accumulated in the fund that’s meant primarily to pay consumers who have been ripped off by licensed contractors who they have hired. Unfortunately, these proposed changes do nothing to hold bad or corrupt contractors accountable. The primary reason to license businesses is so that you can put them out of business if they are not up to the tasks for which they are charging people. The only way to do this is to have hearings and deny licenses to contractors with a history of significant problems who have not reimbursed customers for issues they have caused.

  Additionally, even the solutions posed by these changes will do little to increase the payouts to aggrieved consumers as the $40,000 proposed for it’s not likely because the small claims court cap is $10,000 and very few consumers have the resources to hire attorneys to go to Civil Court for the larger amounts. And, according to Susan Kassapian, the Department’s consumer claims process rejects a high percentage of the complaints they receive, therefore the increase from $10,000 to $20,000 as the maximum possible award will only help a few complainants.
  Having said all of this I want to reiterate that my most pressing point is that without hearings and holding bad contractors accountable we expose New Yorkers to unscrupulous and incompetent businesses that charge people who do not have very much money way more than they can afford for bad work. The hearings should be restored; and we should treat Home Improvement Businesses as the licenses they are.

  Comment attachment
  turkewitz-comments-april-2025.pdf

  Comment added April 2, 2025 9:52pm

• Sandra Hernandez Hernandez

  I agree with Susan Kassapian. You must resume individual consumer restitution hearings! The Trust Fund won’t work the way it was intended without consumer restitution hearings being resumed.
  “There is no enforcement of the Home Improvement Business Law without consumer restitution hearings. It is impossible for most consumers to get Civil or State Supreme Court judgments without spending tens of thousands of dollars so virtually no consumers will be eligible for the $40,000 raised limit on the “standard” invasion process. The standard Invasion process anticipates administrative hearings which are not being done. Individual consumer restitution hearings must be resumed!

  Comment added April 3, 2025 1:52pm

• Karen Miller

  Dcwp is failing to protect home improvement consumers by its willful failure to reinstate hearings for home improvement consumers with complaints against contractors. A trust fund was created to reimburse consumers for bad acts known as behalf of contractors. What are you doing to reimburse consumers who have been ripped off?

  Comment added April 3, 2025 1:58pm

• Karen Miller

  You need to restart hearings on consumer complaints against home improvement contractor and permit consumers to invade the trust fund for the full amount of their loss.

  Comment added April 3, 2025 2:00pm

• Debra Sit

  I agree with Susan Kassapian. The DCWP should enforce the Home Improvement Business Law. Consumers have a right to have hearings regarding restitution.

  Comment added April 3, 2025 4:26pm

• Fred Cantor

  Borrowing from Mickey Mantle’s famous testimony in front of a United States Senate Antitrust Subcommittee hearing in the 1950s (where Mantle testified right after Casey Stengel)—“My views are just about the same as Casey’s”—in this instance, my views are wholeheartedly in agreement with those of Susan Kassapian.

  As I noted in part in a previous comment submitted to City Council: “I am a retired attorney who had the privilege of working with Susan for more than a decade at the former Department of Consumer Affairs; part of my work was on HIC-related matters. I can’t think of anyone who is more knowledgeable than Susan about HIC issues—and I can’t think of anyone who has spent more time and effort in trying to ensure that appropriate remedies are in place for consumers who have suffered harm as the result of shoddy and/or deceptive HIC practices.”

  Thank you, Fred Cantor

  Comment added April 5, 2025 9:35am

• Lori Ciraolo

  I fully support Susan Kassapian’s comments. Resuming consumer restitution hearings is imperative to enforce existing laws, protect vulnerable consumers, and hold unscrupulous contractors accountable. The proposed rule changes in absence of these hearings will only perpetrate the current system of impunity.

  Comment added April 6, 2025 3:34pm

• Kim B. Maxwell

  I am writing to express my concerns regarding the Department of Consumer and Worker Protection’s (DCWP) proposed amendments to the Home Improvement Business Trust Fund (TF) rules. As a homeowner with deep roots in my community and someone who has personally experienced significant financial and emotional distress due to the actions of a dishonest home improvement contractor, I believe these proposed changes do not address the core issues affecting consumers like myself.

  My home, located in Addisleigh Park, Jamaica, Queens, has been in my family for three generations. This neighborhood is not only my family’s legacy it is a landmark of cultural and historical importance, once home to jazz legends like Fats Waller, Count Basie, Lena Horne, Ella Fitzgerald, and Milt Hinton. My intention in restoring this home was to honor that legacy. Instead, I have suffered devastating losses. The contractor I hired took my money and failed to complete the work. I later discovered that this same contractor defrauded at least 13 other New York City residents. Despite repeated efforts to seek resolution, I have received no meaningful assistance from DCWP or any other municipal agency.

  The proposed increase in the maximum disbursement from $25,000 to $40,000 under the standard trust fund invasion process appears to be a positive step. However, this change fails to address the underlying systemic problem: most consumers will never see those funds because they cannot obtain the required court judgments or administrative hearing decisions. Without accessible hearings, the trust fund process remains practically out of reach for the vast majority of homeowners.

  Moreover, the proposed elimination of the biannual contractor contribution requirement once the fund reaches a balance of $2 million raises serious concerns. While it may seem like a routine financial adjustment, it ultimately reduces contractor accountability. Contractors who harm consumers are left free to continue operating, while the fund merely reimburses victims without addressing the root cause of the problem. This is not justice; it’s a band-aid.

  The most critical issue remains the absence of hearings. Without a formal, accessible hearing process, there is no mechanism to hold dishonest contractors accountable for their actions. DCWP must reinstate individual consumer restitution hearings. This is not just about money—it is about justice, trust, and ensuring the system works for those it is meant to protect.

  In summary, while the proposed amendments include surface-level improvements, they fall short of addressing the fundamental issue of accountability. Until hearings are reinstated, the Home Improvement Business Trust Fund will remain ineffective in protecting consumers. My experience, and that of many others, demonstrates the urgent need for a transparent, accessible process that ensures contractors are held responsible and that consumers can obtain the restitution they rightfully deserve.

  Comment added April 6, 2025 4:05pm

• Marianne Ringel

  The Trust Fund won’t work the way it was intended without consumer restitution hearings being resumed.

  Comment added April 6, 2025 5:49pm

• Megan Cash

  It’s cruel and heartless that the NYC Department of Consumers and Worker Protection has decided to stop holding hearings to help consumers who have purchased and who own a home.

  In 2021, a bad actor contractor did significant damage to our home. It could have been life-changing for my partner and I to have had an OATH hearing about the damages caused by the contractor who we hired to REPAIR our home. A hearing could have been converted into a court order. The legal costs are so high, it’s unclear if we can afford to continue chasing this negligent Home Improvement Contractor. It’s a lose/lose situation for a small homeowner.

  Instead of helping, the DCWP seems to have made a choice to put their thumb on the scales helping bad actor Home Improvement Contractors and hurting small home owners. Why?

  Comment added April 7, 2025 10:40am

• Anne McNeill

  I am a consumer, who has been personally impacted by legislation like this and I completely agree with Lori. It is impossible for most consumers to get Civil or State Supreme Court judgments without spending tens of thousands of dollars so virtually no consumers will be eligible for the $40,000 raised limit on the “standard” invasion process.

  Comment added April 7, 2025 5:26pm

• Maha Rasheed

  There is no enforcement of the Home Improvement Business Law without consumer restitution hearings. They must be resumed!

  Comment added April 7, 2025 10:55pm

• Andrew Eiler

  I am Andrew Eiler, the former Director of Legislative Affairs of the Department of Consumer Affairs until I retired in September 2010. After serving in the Legislative Affairs Divisiuoin in various capacities since September 1987 when I began my career at the Department.

  Thus I am very familiar with the purpose for which the Department of Consumer affairs was originally created that it’s staff was always dedicated to perform.

  The Department’s authority to conduct hearings at which the Department could make findings awarding damages to consumers harmed by a licensee violating the licensing law under which they were authorized to operate was a critical feature of the original licensing law enacted shortly after the Department was created that was specifically designed to enable it to directly protect consumer harmed by illegal practices of its licensees.

  It was, indeed, the least the City could do protect consumers from harm inflicted by business it licensed when the City thereby effectively warranted to consumers they could expect it’s licensee to follow the law, and that the City would hold them accountable and recover damages they sustained when its licensees violated the condition of their license that authorized them to conduct business.

  This was the principle embedded in the licensing law the Department was authorized to enforce at its inception that expressly enabled it to seek direct redress for consumers damaged by business practices of its licensees that violated the laws the Department enforced.

  To backstop the consumer’s ability to recover damages from HIC that had gone out of business or whose licenses were revoked, the DCA adopted its HIC Trust Fund that was funded by contributions licensees were required to pay into the Fund unless they satisfied a bonding requirement.

  The Trust Fund effectively protected damaged consumers when it could be invaded to pay damages consumers sustained upon findings made at administrative hearings conducted by the Department Tribunal (or courts that occurred rarely if ever ) and then OATH until 2017. OATH, however, thereafter barred consumers from representing themselves at hearings and instead insisted consumers be represented by DCA attorneys, which the Department declined to do that left consumers having to obtain legal representations to pursue claims against licensees.

  That DCA has thereby abandoned its mission to protect consumers from the ravages of HIC licensees is demonstrated by the Independent Budget Office reporting that the average amount the Fund paid to damaged consumers dropped from $876,000 per year from 2010 to 2017 to the trickle of $153,000 per year since then. With the paltry payments being made by the Fund, it is not surprising that it had grown to almost $15 million (See ) .

  And the solution the Department proposes is to cap future payments by licensees into the Fund if it “contains a balance of more than Two million dollars’” to raise from twenty five to forty thousand dollars all amounts recoverable out of a single home improvement contract and to raise from ten to twenty thousand dollars paid out for a single HIC contract as an alternative invasion of the Fund and lengthen ding by one year the time within which an eligible claim can be made.

  The kindest thing I can say about this proposal for addressing the obstacles the Department has placed before consumers before it will protect them from the harm caused by HIC’s is is that this proposal is an outright consumer fraud, as evidence by the four conditions a consumer must satisfy to be eligible for a disbursement from the Fund. The first (a) is the Department receiving an administrative decision finding an HIC having violated a law, etc. that can never happen under the current regime since the Department and OATH are not conducting such hearings. The last (d) is receipt of a written notice of a judgment or arbitration award, etc., that for all practical purposes is as impossible as option 1 since no such actions are known to have occurred in the absence of the Department conducting them which it never does. Finally, the Department may require payment when under (b) it has settled a summons or under (c) it resolved a complaint against an HIC with “a settlement agreement.”

  Including disbursements for mediated complaints under (c) sounds impressive until one realizes that “Before the department eliminated the tribunals in 2017, mediation success rates hovered above 60%. They’ve since dropped to where only about a third of mediations are successful. For home improvement contractors, successful mediations stand at around 25%.” (Charles Lane, Including settlements of a summons sounds even more impressive until one realizes that without having an incentive to settle, such as facing a hearing before a tribunal, provides no incentive whatever for the business to settle on anything but terms most favorable to the business. Indeed, as Susan Kassapian, former Assistant Commissioner and General Counsel noted in her comment, of the 1676 consumers who were sent claim letters, only 313 filed claims and of these only 125 were approved for TF invasions for a little more than $1.2 million. The majority of the claims – 186 – were denied” for a business success rate of 59% – and the Department still dares to call itself a Consumer Affairs Department.

  The only portion of the rule that will have real consequences is that ending further contributions until the Fund drops to $2 million is designed to bleed it dry with paltry awards that will leave high and dry consumers swindled by HIC.

  Unless the Department initiates holding hearing as was done before the hearing authority was transferred to OATH, amendments to the HIC rule such as contained in this proposal do not merit to being called window dressing for the actual problems consumer face in the home improvement market.

  Comment added April 8, 2025 6:17pm

• Jeffrey Irish

  I agree with Susan Kassapian. Individual consumer restitution hearings must be resumed. I filed a timely case with DCA/DCWP and it was closed without any consideration of a hearing allowing this same contractor to move on to his next victims. This same contractor committed the same act over and over targeting fire victims, seniors and minorities.

  The Department of Consumer and Worker Protection needs to amend rules applicable to the Home Improvement Business Trust Fund to increase the maximum disbursement amount and restore consumer restitution hearings.

  Comment added April 9, 2025 12:54pm

• Susan Lee

  Restitution hearings should be resumed, and if the department truly cared about properly addressing wronged consumers, there should be consumer affairs attorneys or trained advocates assigned to help each wronged consumer like how they handled the complaints in the past. To see things from the perspective of a wronged consumer — having your home destroyed or to be swindled by incompetent or otherwise crooked contractors can be very traumatic and the process for redress can be confusing, especially to those that have a language barrier, are elderly or disabled, and these vulnerable populations tend to be the majority of consumers affected by bad home improvement contractors. Furthermore, unless you hear the individual detailed accounts of what each consumer has gone through, you may not understand the severity of the situation and how it affected the individual consumer. Having a consumer affairs attorney or trained advocate to help in the complaint and restitution process would streamline the process and make it more efficient and effective.

  In my and my elderly mother’s case, the crooked and incompetent contractors not only did shoddy work that created unsafe conditions and created a much bigger problem than the tiny leak we were trying to fix, but because we were viewed as easy targets — being female, my mother being elderly with a language barrier, and I disabled – these awful contractors had the audacity to brazenly and repeatedly threaten to cause destruction and violence to harm us and cause damage to our home when we diplomatically called them out on their shoddy work and asked them to address it. They showed up at my home wielding hammers threatening to destroy the shoddy work they had done to create more harm and chaos. I can’t believe I had to call a male to stand up for me and address these thug contractors via speakerphone, and only when they heard an assertive male addressing them via speakerphone did these thug contractors go away. A female or other (unfortunately) vulnerable member of society should not have to be subject to this kind of hostile, thug-like behavior by crooked contractors and have to live in fear like this when we are the ones that were wronged in the first place. The court system and uncaring judges seem to only perpetuate this by being hostile and punitive towards the same vulnerable populations – women, elderly, those with a language barrier and the disabled — so how can we count on that system to help in this type of a situation? Clearly, we can’t, which illustrates the unjust and grim direction things seem to be going in this city. My hope is that we each try to improve processes, listen to those that understand due to experience with such problems, and think deeply about ways to intelligently reform these systems so that they actually live up to their purpose. An agency should never lose sight of its purpose.

  Bad home improvement contractors found to have caused damages to a consumer should be punished, licenses revoked and ordered to pay into the trust fund to help wronged consumers.

  Why dismantle a process that was working well to address and cover damages of wronged consumers? Whatever process was in place in the past that was working should be reinstated and with necessary improvements. I worked with Susan Kassapian at the DCA when it operated in a logical, consumer-centered manner. I have said this before, but I do believe the department should return to its roots and, once again, be the Department of Consumer Affairs and not a mishmosh of two completely different topic areas. Workers Protection should be a separate department. This is just common sense.

  I would also like to add that having the city post notices or some way to inform the people of NYC about what this city agency can do for consumers who have been wronged by crooked home improvement contractors would also be great because I am sure a lot of people don’t realize there is this city agency to help wronged consumers. However, first, the processes to help consumers should be improved and restored – with improvements — to the previous processes that worked and were consumer-centered.

  Comment added April 10, 2025 1:09am

• Suzette Edmonds Irish

  I am a NYC retiree, with over 35 years of service, I am a senior, a minority woman and I am a fire victim. I wholeheartedly agree with Susan Kassapian, there is no enforcement of the Home Improvement Business Law without consumer restitution hearings. They must be resumed.

  My house had a fire in 2016. My contractor, which is the same contractor as Anne McNeil, Kim Maxwell and others that have submitted comments, took thousands of dollars for restoration and repairs of my home. The contractor never did the work that he was paid for. He left my home in shambles; any work that was done by this contractor was shoddy and had to be redone. I spent the last 8 years out of my home. This contractor knew exactly what he was doing and knew he could get away with his scams.

  I should have been allowed a restitution hearing, and I should not have been referred to the courts and expected to take on the cost of litigation. I hired an attorney; my case is still lingering in the courts because I can’t afford the legal fees.

  New York City consumers could benefit from amendments to the rules pertaining to the Home Improvement Business Trust Fund. The maximum restitution amount must be evaluated for the proposed increased amount. Home restoration, materials and repairs are expensive. The limit for the DCWP Trust Fund must be raised. The Trust Fund won’t work the way it was intended without consumer restitution hearings being resumed.

  Comment added April 10, 2025 9:51am

• Kevin Gall

  I totally agree with Susan Kassapian. The Consumer Restitution hearings must be resumed

  Comment added April 10, 2025 1:05pm

• Angela Campbell

  I agree with Susan Kassapian that consumer restitution hearings must be resumed.

  Comment added April 10, 2025 4:49pm

• Ava Alterman

  I concur with the comments made by Susan Kassapian and Andrew Eiler. When viewed within the context they provide, the proposed amendments could have been drafted by Kafka on a visit to Alice in Wonderland.
  A rule that raises the amount awarded to wronged consumers is of little comfort to those consumers if there are substantial barriers to recover any of those monies. When no distributions are made to aggrieved consumers, the fund will grow. A rule to eliminate the requirement for contractors to contribute when the fund grows benefits only unscrupulous contractors.
  The refusal to hold hearings and the high denial rate of claims render the DCWP ineffective in accomplishing its intended purpose.
  The way to protect consumers and punish the unscrupulous home improvement contractors is by resuming hearings in order to provide restitution, collect fines and suspend licenses.

  Comment added April 11, 2025 9:23am