The city investigates seven complaints that the plumbing giant used unfair tactics to get business in Minneapolis.
For one Minneapolis homeowner, a rank smell in her basement and a $239 visit from Roto-Rooter were just the beginning of her problems. The routine drain cleaning escalated into every homeowner's nightmare -- a Saturday visit from a plumbing contractor who urged a $12,000 repair.
Another Minneapolis homeowner was told he needed to spend $15,000 to replace his sewer line, even though another plumber told him the damage was grossly exaggerated. Roto-Rooter even tried to charge a homeowner $3,600 to repair a water line its own workers broke.
After investigating those complaints and four others by local residents, Minneapolis officials accused Roto-Rooter's Twin Cities branch of misleading customers and using other unfair tactics to pressure homeowners into big-ticket repair jobs.
In a recent meeting with city officials, Roto-Rooter representatives agreed to resolve the complaints and revise its policies to make sure the same problems don't happen again. If the City Council approves the tentative deal, Roto-Rooter will face more supervision by city officials, be obligated to provide detailed invoices to customers and meet other conditions.
Minneapolis officials said they might forgo financial penalties on the company, which could be fined as much as $4,000 for 20 alleged violations. Some customers may wind up getting refunds or other help from Roto-Rooter, one of the nation's largest plumbing and drain-cleaning operations.
"The reason we're willing to proceed with this settlement is we believe this company is engaging us in good faith," said Henry Reimer, the city's assistant director of regulatory services. "We will know whether that's true or not by whether or not they comply with these conditions."
Jon Austin, a spokesman for the local Roto-Rooter office, said many of the problems originated with a subcontractor that is no longer being used by Roto-Rooter.
"We've also used this situation as an opportunity to retrain some of our sales team on best practices and to reinforce the company culture of service to customers," Austin said.
City and state officials said they rarely receive complaints about plumbers engaging in unethical conduct. Minneapolis received nine consumer complaints about plumbers last year, including the seven Roto-Rooter cases. Meanwhile, the state Department of Labor and Industry investigated 114 plumbers in 2010, leading to 100 enforcement actions. Most of those cases involved unlicensed plumbers.
Experts said the rash of complaints in Minneapolis shows why it is important to get a second opinion on large plumbing jobs.
Christopher Frey, of southwest Minneapolis, said he was shocked when a Roto-Rooter representative told him in November that his sewer line was broken and needed immediate repair.
The salesman "did a superb job of painting a very bleak picture, imploring a sense of great urgency while leveraging Roto-Rooter's unique ability to bring this disaster to resolution within 24 hours," Frey wrote to the city.
Frey originally agreed to a $4,000 job, but the estimate grew to $15,000 when Roto-Rooter's workers discovered more damage. At that point, Frey called another contractor who said the clog was caused by root growth and not a broken line. Even though workers had excavated his yard, Frey recovered his money after canceling the contract and disputing the original $4,000 charge on his credit card.
In another complaint, a Pillsbury Avenue homeowner said she paid $15,000 for repairs even though a city inspector later said the work was probably unnecessary.
"Our basement and front yard were all dug up and our lives in complete disarray," the homeowner wrote. "We were unable to cook or use our bathrooms; we felt compelled to have work done so we could get our lives back in order."
In one case, Roto-Rooter tried to overcome a homeowner's concerns about shoddy work by falsely claiming that a city inspector had already approved its repairs. In fact, city officials noted, inspectors wouldn't approve the permit until Roto-Rooter corrected the problem.
Grant Wilson, the city's manager of licenses and consumer services, said his staff began looking into Roto-Rooter because of the dollars involved and the high number of complaints between last August and November.
"The ability to swindle was very high in these cases," Wilson said. "It appeared to us that there could be some deceptive practices happening so that's why we scheduled the licensing settlement conference."
Reimer said the city doesn't believe the problems were intentionally caused by the management of Roto-Rooter, but may have been partly due to "a lack of oversight or weak management."
Charlie Durenberger, head of the Labor and Industry Department's contractor enforcement unit, said state officials will not be pursuing Roto-Rooter, in part because state law currently prohibits his agency from taking action against plumbing companies. Until next year, when the law changes, Durenberger's agents are only allowed to discipline individual plumbers.
"We want these companies to know if that's what they're doing, once January 2012 comes around, we're going to be cracking down on that," Durenberger said.
Lora Pabst • 612-673-4628