Clearing the waters: Reforming pool and spa contractor standards

By Steve Leslie

The need for trust, transparency, and excellent customer service has always been prominent in many mission statements. Now, maybe more than ever, those characteristics must be implemented, particularly in construction. The pool and spa industry saw an unprecedented boom during the pandemic, which has since subsided. However, some stories that developed from this era still haunt the industry today.

This author had the pleasure of undertaking a project investigating various accounts of swimming pool contractor fraud from across Canada, from news articles, and speaking with various pool and spa professionals to dissect the similarities amongst current and ongoing fraud cases. This article presents the findings from these news articles and interviews, offering tips for professionals, as well as the collective responsibility of the pool and spa industry to help facilitate more positive professional experiences.

Earlier this year, the Windsor Police issued a warning to their social media followers to be on alert for contractor scams.¹ Part of the fallout from such a hot construction market during the pandemic has been people and companies discovering all the “malpractice” that occurred. Many became “contractors” during the pandemic to capitalize on the insane demand. Some were qualified to undertake specific tasks, and others were not. The pool and spa industry was no exception to this, and as a result, people are coming out against those in the industry who made promises that have not been kept. The results have led to many lawsuits being filed.

Several of these cases throughout Canada appear to have certain patterns. One could argue that some of these cases may have been caused by financial mismanagement, leading to deception out of desperation. Before continuing, this author would like to point out that most of these cases are still pending trials and verdicts, so company names will not be mentioned.

What is contractor fraud?

Tierney Stauffer LLP, a law firm with multiple locations across Ontario, defines contractor fraud as: “when a contractor misrepresents their work or otherwise engages in illegal activity. Examples of contractor fraud typically involve contractors accepting a deposit or payment for services and failing to start the project, misrepresenting the work, or abandoning the project entirely.”

These examples are highlighted in various contractor fraud cases across Canada, including a handful in Ontario. What is most interesting is the similarities between the practices of all the defendants. This includes:

• Ask for a substantial upfront deposit (in some cases, nearly the entire amount of the project).
• Unclear contract and project schedules, which lead to projects dragging on or the contractor abandoning the project when they cannot extract any more money.
• Lack of transparency, including very little or no communication for weeks.

There may be more “red flags” throughout each case, but these appear to be the most prominent. In one specific case in British Columbia, one homeowner was told their swimming pool contractor had “died” but was then found working for a different company a short time later.

Looking at this list, one may question what kind of due diligence was done on the homeowner’s behalf before hiring these contractors and how they fell for such a trap. Although the homeowner is responsible for doing their research at the end of the day, the answer is slightly more complex.

Stepping back into the pandemic, there was an enormous amount of demand in the pool and spa industry, crippling supply shortages, and what seemed to be never-ending price increases. It was a case of “if you snooze, you lose.” If homeowners waited to make a decision, there was a lineup of people waiting to hand over deposits to secure their pool build with any swimming pool contractor that claimed to be available. It was similar to what happened in the real estate industry, where crazy bidding wars took place without conditions (including inspections or financing). As a result, even reputable contractors would have difficulty explaining how long a project would take or when a client could expect to have all their equipment installed. With such a large demand, most companies and contractors received negative reviews online for poor communication. In actuality, they could not keep up with all the calls, emails, and quotes.

What can contractors do?

Admittedly, there is no “one right answer.” However, pool and spa professionals can help advocate their business to stand above competitors in several ways. In episode 17 of the series “Meet Your Contractor,” featured on The PromoMinds Podcast, Ralpha Lembcke of R. Lembcke & Associates, a prominent educator in the construction industry, suggests one of the best avenues to accomplish this is by joining reputable industry associations. Organizations such as the Pool & Hot Tub Council of Canada (PHTCC), province-specific landscape associations (such as Landscape Alberta, Landscape Ontario, etc.), and even third-party accredited companies such as the Better Business Bureau (BBB), and Homestars all present a message of having higher standards. This allows contractors to include a “seal of approval” on their websites and social media, as well as flyers and brochures. Many organizations offer training, certifications, industry events, and even partnered programs for discounted business needs. Further, industry-specific certifications can be achieved without becoming a member of one of these organizations. One of the best examples would be a Certified Pool Operator (CPO) and even an Aquatic Recreation Industry Specialist/Expert (which is discounted for members of the PHTCC).

Next, professionals can implement a system for acquiring positive reviews from each client. The more Google reviews and testimonials a contractor can display to potential new clients, the more they appear professional and trustworthy. A business with many positive reviews looks more trustworthy than just a few. Along with reviews, having clients who will go out of their way to recommend a contractor’s services, even volunteering to speak directly to potential clients, once again promotes trust and transparency. To help ensure more positive reviews, professionals should consider evaluating their customer’s overall experience. According to Salesforce Research, many consumers agree that the customer experience is as important as the delivered product or service (80 per cent). Further, only 56 per cent of those surveyed admitted to having a positive customer experience in the last year. This was a topic of discussion shared between this author and Leigh Hinsperger of Hinspergers Poly Industries Ltd (episode 15). Hinsperger shares how important customer service is to sustained business success, especially in Canada, and believes that “people’s ability to interact [with each other] seems to be at an all-time low.”

Apart from the typical customer service duties, such as helping customers with different products and services, quickly replying to emails and answering phone calls, and finding ways to go above and beyond, can cause a customer from being just satisfied to becoming a raving fan of one’s business. This helps promote an incredibly trustworthy brand and uses the best form of advertising: word of mouth.

Money discussion

There may not be a set standard for deposits and payments throughout the project as it is open for discussion. However, a customer may hesitate to give a substantial amount upfront before completing any work. As seen in many ongoing swimming pool contractor fraud cases (which can be found int the “Resources” section at the end of this article), asking for deposits equivalent to more than 50 per cent of the project (in some cases, almost the full amount) is common behaviour. Understandably, the contractor may be unable to begin work without securing a certain amount of money beforehand.

Many price increases occurred during the pandemic, several in just one season. It was extremely difficult to be able to price a job in the spring and rely on that same quote by the fall or even start a project with one agreed price and have that price reflected at the end of the project. Ralph Lembcke of R. Lembcke & Associates (episode 17) iterates how implementing an escalation clause within a contract can help mitigate risk during inflationary periods. The homeowner may need an explanation, but this may help protect against some of the current ongoing financial disputes. Communicating when the homeowner should expect to make payments and specifics around what kind of work they can expect to be completed beforehand will give them a better understanding of the overall project. It may also help them feel more comfortable handing over large amounts of money. This can even be a selling feature when presenting to a potential client, as some companies may not have such a clear, concise contract to use.

There are many lessons to be learned from the fallouts of the pandemic. Angelo Mariani Jr. (episode 11) stated that contractor fraud has always existed in the industry but has not been seen to the extent in recent years. Discussions on possible licenses or even apprenticeship programs were also prevalent throughout several of the interviews in “Meet Your Contractor.”

One thing is sure: almost every pool and spa professional this author has conversed with wants to help eliminate these issues, as they bring the entire industry down altogether. If homeowners have a bad experience with one company, maybe they decide they no longer need a pool or cancel any plans to install a pool at a future residence. For those professionals looking to raise their standards in the industry and help provide the best experience possible to their customers, look for the lessons found within this article. Become a member of a recognized industry organization, seek out training and certifications in the industry, and deliver an exceptional customer experience. Part of having an exceptional customer experience begins with having a clear, concise contract that lays out the project, along with reasonable payment schedules for both parties involved. By using this road map and being aware of some of the issues that have led to ongoing legal disputes, pool and spa professionals can continue to help build up this beloved industry.

Resources

• The PromoMinds Podcast | Meet Your Contractor series (YouTube)
• Windsor/Blenheim, Ont., contractor fraud
• London, Ont., contractor fraud
• Barrie, Ont., contractor fraud
• Ottawa contractor fraud
• Surrey, B.C., contractor fraud
• Calgary, Alta., contractor fraud

Notes

¹ See the Windsor Police Instagram Post, March 13, 2024, “Beware of Contractor Scams.”

Steve Leslie is a business development and marketing specialist at Highbury Pools, a leading B2B manufacturer and distributor in the swimming pool industry and the host of The PromoMinds Podcast. With a strong focus on client acquisition, retention, and innovative marketing strategies, he is dedicated to helping businesses thrive and succeed in the competitive pool and spa market. Connect with Leslie to explore how Highbury Pools can help support your business needs and help drive your growth.