The BORG Attack: Home Depot's Contractors Instructed to Intentionally Inflate Estimates

[133724]

KNBC in Los Angeles is investigating a nationwide epidemic of fraud being perpetrated by Home Depot. Is it that bad? Yeah, it's that bad. From KNBC:

Now, NBC4 has heard from customers in 22 states and from insiders from across the country, who have given NBC4 a paper trail of internal documents, suggesting the company overcharges customers on window and siding installations, kitchen remodels and on roofing jobs."

http://consumerist.com/consumer/tag/home-depots-contractors-instructed-to-intentionally-inflate-estimates-charge-for-items-not-installed-240340.php

The BORG Attack (Big Orange Retail giant e.g. BORG)

[radfringe]

1. Why would they "over estimate" in the first place?

If I were to have extensive work done on my house, I would "shop" around for contractor estimates, compare the prices etc.

Seems to me the over-estimating would discourage customers from using them in the first place - where as under-estimating and then nickle-dimeing the prices upwards once work began would be a better tactic in defrauding a customer.

I worked in a housing rehab program for a few years, we provided loans to low-income households (gov't program). In doing our inspections and preliminary estimates it was always based on the premise that the cost may be higher as you don't know what you are going to run into once you start the work.

For instance - if a window is being installed, we may find the wood in/around the opening also needs to be replaced - something you can't see until you start working on it....

[ayeshahaqqiqa]

2. If our company over estimated our termite service

we'd never get any jobs. Most homeowners/realtors call around and get estimates from all the termite companies. We've been known to get (or lose) a bid because of one dollar difference.

[MadHound]

7. Because a lot of foolish people come into Home Despot,

See the windows, doors, whatever that they really, really like, and their higher brain function stops right there. Rather than shopping around for a lower price, they succumb to the thrill of impulse buying, and afraid the Home Despot is the only retailer for that particular item, go ahead and purchase the item and installation package right there on the spot. Home Despot over estimates the price of the work a hefty chunk, but not enough to trip the triggers of the mostly suburban buyers, many of whom haven't a clue what the real going price is for the work that they're signing up for.

Just another case of corporate America fleecing the ignorant and gullible.

[PVnRT]

3. A contractor padding an estimate? NO FUCKING WAY!

My God! That never happens! When did this start? I'm shocked, I say, shocked.

:sarcasm:

[1932]

14. They're not padding it. They're charging for things they didn't do.

I guess the headline was written to make HD sound as guiltless as possible.

[conscious evolution]

4. This could be a case of fraud

Or it could be a case of protecting the customer from hidden or unexpected cost overruns from unexpected repairs for hidden damage or other problems that are not apparent until construction starts.Without further info it is hard to tell what they are doing here.
As a electrician in the home remodal field I run into unexpected diffuculties all the time.What may start out as a simple kitchen remodel can easily turn into a meter and panel replacement if existing load calculations and breaker spaces are not adequate for the upgrade.I recently had this very thing happen to me.What started as a simple $1200 dollar project mushroomed to a $4800 dollar job because of inadequate electrical service equipment in the house.(They were replacing gas appliances with an all electric kitchen.The new range/oven combo at 60 amps(not even including the load factor for a new dishwasher,disposal,refrigerator and new convienance outlets) combined with the 70 amp existing load was well over the load available from their old 125 amp service.Not upgradind the service would have resulted in an unsafe system that could easily have burned their house down.)
As long as the customer knows it is an estimate based on a worse case scenario and that it could end up costing a lot less I have no problem with this.
I also see where this could lead to serious abuse of the customer.Definitely something to keep an eye on.

[sendero]

5. I agree with some of what you say...

... but I have NEVER, NOT ONCE, gotten an actual job of that sort done for less than the estimate. Why would a contractor lower the "price" you have already agreed to? It just doesn't happen very often.

[conscious evolution]

6. It happens occasionally

believe it or not.
Though not often.
I think this is an attempt by Home Depot to cover their ass's in case there are overruns.Cost overruns due to unexpected problems can give people a bad taste in their mouths in how they regard HD and I think this is to head off bad feelings on the customers part.
I would hope that HD's sales staff are upfront with their customers regarding the possibility of additional expences being possible.If a customer can only afford the lowest bid possible they are really gonna get screwed over in the event of overruns.Nothing worse than a half finished and/or jury-rigged job.

[sendero]

9. Sorry..

.... that may be what you think, but it is not an accepted practice nor should it be.

For most of the sorts of jobs we're talking about, a pro can walk in and s/he'll know in 5 minutes what the work is going to be and what it will cost. We're not talking about major remodeling projects here, we're talking about things like installing tile or carpet or windows. These are generally cut-and-dried jobs. If Hd was routinely overbidding the work I GUARANTEE you they were not routinely delivering the finished work at below estimate.

Of course, the consumer should not trust one bid for any major work. But personally, having been a long time HD shopper who used to really like them and has watched them ZOOM to the bottom in the last few years, sleazy practices don't surprise me at all. Their retail operation has gotten so lame I only go there in an emergency any more.

[conscious evolution]

13. Onething we can agree on

HD sucks.
I seldom use them for any supplies.
What sucks even worse.HD just bought my favorite supply house company.I stopped at Hughes Supply the other day to pick up some material and the name had been changed to HD Supply.It was just like going into a HD
Sales guy."Sorry we don't carry that anymore" or "Sorry we will have to order that part.We no longer keep it in stock."
Me "It is just A SIMPLE SWITCH!How can you NOT carry LIGHT SWITCHES ANYMORE??!!

Time to find a new supply house.AARRRGGHH!!!

[Thothmes]

8. Estimates

Doubt this is fraud. Each license contractor is free to submit what ever bid he wants to for a contract. The problem comes is when people do not take the time and effort to solicit several contractor bids for the same work. As we have seen in Iraq, sole source contracts are really licenses to steal.

[H2O Man]

10. Home Depot

gets the very lowest of ratings from the contractor who recently did some work for me. And I have a lower opinion of them than he does.

[1932]

11. The fraud, by the way, is that HD didn't do the work they claimed they did.

I read the other posts here, and it's apparent that nobody read the story.

The allegation isn't that HD charged high prices. The allegation is that HD charged for things that they never installed.

[ProdigalJunkMail]

12. we had an estimate for carpeting from HD

and the number was so high in comparison to the other quotes we got that I asked them what square footage they were using. When they gave the right footage I simply asked them to leave my home...it was outrageous...

sP