Printer Friendly

PREATE SUES PHILADELPHIA RENTAL HOUSING BUSINESS, ITS OPERATORS

 HARRISBURG, Pa., Feb. 2 /PRNewswire/ -- Charging that they are "illegally operating a lucrative rental housing scam that rips off those who can least afford it," Attorney General Ernie Preate Jr. today sued a Philadelphia business and its owners.
 "Based on our investigation, we believe that more than a thousand consumers each have lost $400 or more pursuing the defendants' deceptive and worthless promise to find low-cost rental housing for them," Preate said.
 "This alleged scheme exploits the lack of low-priced housing in Philadelphia," he said. "Unfortunately, the typical victims are those with limited incomes, those on public assistance or disability, those with credit problems, and those who have been evicted from their homes."
 Named as defendants in a suit filed in Philadelphia Common Pleas Court by Preate's Bureau of Consumer Protection are American Home Rentals Inc., 611 S. Orianna St., Philadelphia, and its owners, cousins Jerry Cohen of 1755 Skippack Pike, Blue Bell, and Steven Cohen of 116 Tomlinson Road, Philadelphia.
 The suit asks the court to bar the defendants from continuing their allegedly illegal operation and to order them to pay restitution and civil penalties.
 The suit alleges that AHR placed newspaper ads claiming it can find rental housing for consumers with limited income, bad credit history or other financial problems.
 Consumers responding to the ads allegedly are asked to pay fees of $400 or more in return for a guarantee that AHR will find housing for them, according to the suit.
 "We allege that despite the defendants' guarantees,' few of the consumers are ever placed in rental housing through American Home Rentals," Preate said.
 The suit alleges that after taking the fees, AHR refuses to show properties to clients unless they are able to:
 -- Produce evidence that they can pay two months' rent and a security deposit in advance.
 -- Provide a wide range of documentation, including past rent receipts, references from landlords and proof of income.
 -- Provide written agreements indicating they've worked out payment plans with their creditors.
 The suit alleges that even when clients meet the requirements, they are unlikely to obtain housing because AHR doesn't have enough habitable properties to meet the demand.
 "The Cohens own hundreds of properties in low-income areas of Philadelphia, but consumers have told us that many of the units they've been shown are dilapidated and in need of major repairs," Preate said.
 The suit claims that while as many as 50 consumers were joining the AHR program each week at its peak last year, the defendants typically had only 30 properties become available for rent each month.
 The suit alleges that AHR sales personnel are instructed "to tell potential clients whatever is necessary to convince them to pay the fee."
 AHR salespersons are paid about $200 per week and a commission of about 20 percent of their sales, according to the suit. The defendants also allegedly pay the salespersons a $50 bonus if they lease a property to a white consumer.
 The suit alleges that the defendants are not licensed as rental listing referral agents and that they don't make promised major repairs to properties leased to consumers.
 The suit claims the defendants advertise and operate a "976" audiotex phone message service offering callers an opportunity to get information on housing availability.
 The suit alleges that although consumers are billed 99 cents per minute for the call, which may run up to 20 minutes, callers are never given an opportunity to leave their name and telephone number so that they can be contacted by the defendants.
 Preate said his office's investigation was conducted under the direction of Deputy Attorney General Sherri Glantz Patchen of the Bureau of Consumer Protection's Philadelphia office.
 Patchen said the bureau has gotten more than 40 complaints, many of them forwarded to the bureau by Tenants Action Group of Philadelphia.
 She noted that Community Legal Services of Philadelphia today filed a similar suit against AHR and the Cohens.
 /delval/
 -0- 2/2/93
 /CONTACT: Jack J. Lewis, assistant press secretary of the Office of Attorney General, 717-787-5211, or at home, 717-657-9840/


CO: Pennsylvania Attorney General's Office ST: Pennsylvania IN: SU:

MK -- PH006 -- 1726 02/02/93 10:06 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 2, 1993
Words:692
Previous Article:ANSERPHONE, INC. ISSUES STATEMENT
Next Article:ELF ATOCHEM ANNOUNCES NEW NAME FOR M & T HARSHAW AND THE ELECTROPLATING DIVISION OF SCHERING AG
Topics:


Related Articles
ATTORNEY GENERAL SUES MONTGOMERY COUNTY VEHICLE LEASE BROKER
MAILBOX RENTAL COMPANY TO CHANGE MARKETING PRACTICES, PAY $12,500
PREATE CHARGES BID-RIGGING ON MILK PACT FOR PHILADELPHIA SCHOOLS
MIDAS SHOP RECOMMENDED UNNEEDED REPAIRS, COURT AGREEMENT ALLEGES
PREATE WARNS PHILADELPHIA AREA RESIDENTS OF CREDIT CARD SCHEME
PREATE SAYS PHILADELPHIA BUSINESS VIOLATING FEB. 22 COURT ORDER
NURSING HOME OPERATOR PLEADS NO CONTEST IN DEATHS OF TWO PATIENTS
PENNSYLVANIA ATTORNEY GENERAL SAYS PHILADELPHIA LATINO ORGANIZATION GETS VAN UNDER CONSUMER SETTLEMENT
APARTMENT RENTAL AGENCY SETTLES SECURITY DEPOSIT COMPLAINTS
Aaron Rents, Inc. Announces New Franchisees; Buyback of 4 Franchised Stores; Accelerated Store Openings.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters