“When Waterworld allegedly failed to perform the work consumers had paid for, many of those consumers lost more than their down payments. They also faced significant additional costs related to excavating huge holes and otherwise preparing for the installation of in-ground pools that never reached their homes,” Acting Attorney General Hoffman said.

The State’s lawsuit, against Waterworld and its vice president, Donald Tallman, also alleges that the company’s failure to fulfill its promises created significant costs and inconvenience for multiple consumers. For example, several consumers rented heavy equipment, had large holes excavated in their backyards, and obtained delivery of 60 to 80 tons of stone or gravel, all in preparation for the dates on which Waterworld had promised to deliver their pools. The company then failed to show up – not merely missing the promised dates, but failing to deliver the pools at all.

“Consumers should not have to fear being ripped off or abused when hiring a pool installation company or any other type of home improvement contractor,” Division of Consumer Affairs Acting Director Steve Lee said. “Through consumer education and enforcement actions, we are pursuing every action to ensure a fair and safe marketplace in the home improvement industry for New Jersey’s consumers.”

As additionally set forth in the State’s Complaint, Waterworld and Tallman allegedly violated the Consumer Fraud Act, Contractors’ Registration Act, and related regulations through the following unconscionable commercial practices, among others:

When Waterworld did arrive at consumers’ homes, it often performed substandard work and then failed to make the necessary corrective repairs, even after the consumers demanded repairs. Examples include electrical work that failed three municipal inspections, installation of a pool that developed hairline cracks within a week of installation, and installation of pools in which the walls and floor became covered with white powder.

On multiple other occasions, Waterworld commenced work at consumers’ homes, only to abandon the work and not return for weeks, months, or at all.

When consumers attempted to contact Waterworld about its failure to perform contracted-for work, its performance of substandard work, or other complaints, the company failed to return their calls. The company also refused to issue refunds when requested by consumers. The consumers had paid deposits in amounts ranging from approximately $624 to approximately $46,000.

Businesses that install residential in-ground pools are required to register with the Division of Consumer Affairs as home improvement contractors, and to comply with the Contractors’ Registration Act and related regulations.

However, the Division of Consumer Affairs discovered that Waterworld allegedly submitted false information to the State in its March 2014 application for the reinstatement of its home improvement contractor registration. Waterworld’s application stated that the company had commercial general liability insurance, as required by law. The State learned, however, that Waterworld’s insurance policy had expired.

Waterworld also provided consumers with home improvement contracts that omitted information required by New Jersey law, such as a project’s start and/or completion date, a copy of the company’s general liability insurance certificate, and/or other required information.

The Division of Consumer Affairs has received 17 consumer complaints about Waterworld.

A violation of the Consumer Fraud Act or the Contractors Registration Act carries a civil penalty of up to $10,000 for the initial violation, and up to $20,000 for each subsequent violation.

Investigator Michelle Davis, assigned to the Division of Consumer Affairs Office of Consumer Protection, conducted this investigation.

Deputy Attorney General Alina Wells, assigned to the Consumer Fraud Prosecution Section within the Division of Law, is representing the State in this action.

Tips for Consumers, When Hiring a Home Improvement Contractor:

Learn about any contractor before deciding to hire them. It is ideal to work with a contractor who is recommended by people you know. It also is advisable to ask the contractor for references and speak with those references about the contractor's work.

Contact the Division of Consumer Affairs to learn if the contractor is duly registered to perform home improvement work in New Jersey, and learn whether the contractor has been the subject of consumer complaints and/or legal action by the Division. You can call the Division at 800-242-5846 or use the Division's website, NJConsumerAffairs.gov.

Before hiring the contractor, demand a copy of the contractor's liability insurance policy and contact the insurer to learn whether the policy is valid.

Obtain a written contract. Contracts for home improvement projects costing $500 or more must be in writing. They must include the legal name, business address, and registration number of the contractor as well as a start date, completion date, description of the work to be done, and the total price.

Make sure all warranties and guarantees are in writing, and that the contract states the name brands or quality/grades of the materials to be used.

Ensure that all applicable construction permits are obtained by the contractor, from the appropriate municipality.

Remember that it is customary not to pay for the entire project in advance. The general practice is to pay for one-third in advance, one-third halfway through, and one-third upon completion.

Additional tips can be found in the Division's Consumer Brief on "Hiring Home Improvement Contractors," also available in Spanish.

Information for Home Improvement Contractors:

To advertise and perform home improvement work legally in New Jersey, contractors must register with the New Jersey Division of Consumer Affairs. View registration materials and information.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint online with the State Division of Consumer Affairs or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

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