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US Senator Sends Letter to FTC Urging Investigation on Chinese Drywall Scams

United States Senator Mary L. Landrieu, D-La., today urged the Federal Trade Commission (FTC) to help protect homeowners from scams by companies and individuals claiming to have solutions for tainted Chinese drywall. In a letter to FTC Chairman Jon Leibowitz, Sen. Landrieu and five other Senators raised concerns about deceptive practices that prey on consumers with defective drywall and asked the Commission to fully investigate and prosecute companies engaging in these activities.

The letter was signed by Senators Bill Nelson (D-Fla.), David Vitter (R-La.), Thad Cochran (R-Miss.), Roger Wicker (R-Miss.) and Jim Webb (D-Va.).

"Homeowners in our states are already struggling to deal with the health and property issues related to the defective drywall," the Senators wrote. "We believe that these impacted homeowners should not be further victimized by spending additional funds on remediation or preliminary testing not approved or endorsed by the Federal government or any State agency. As we work together with the designated Federal and State agencies to develop real solutions to the problems created by contaminated drywall, it is important that the FTC ensure that homeowners are protected from companies seeking to make fast money off the misfortune of these homeowners."

Following well-publicized reports detailing the problems with defective Chinese drywall, companies and individuals have announced and advertised "solutions" for affected homeowners. These solutions promise testing procedures to identify Chinese drywall or remediation protocols that claim to completely remove the product from homes. Some companies have even advertised that they are part of a national certification program - despite the fact that the federal government has yet to fully determine the exact substances in this defective product.

"We respectfully request that the FTC investigate these claims in order to ensure that homeowners are not further damaged financially by this crisis," the Senators wrote. "We would also request that the FTC continue to work with the affected states as some are already investigating consumer complaints."

Since 2006, more than 550 million pounds of drywall have been imported to the United States from China. In the last 20 months, countless homeowners across the country have reported serious metal corrosion, noxious fumes, and health concerns. Reported symptoms have included bloody noses, headaches, insomnia, and skin irritation. Preliminary testing has confirmed that imported defective drywall is the problem, but these tests have not been able to pinpoint the problem substance in the drywall. More comprehensive results are expected from the Consumer Product Safety Commission (CPSC) and the Environmental Protection Agency (EPA) later this month. As of late October, the CPSC had received 1,900 incident reports from 30 states, the District of Columbia, and Puerto Rico.

Earlier this month, Sen. Landrieu, Chair of the Senate Small Business Committee, introduced the Small Business Administration Disaster Recovery and Reform Act (S. 2731), a bill to reform the disaster recovery programs run by the Small Business Administration (SBA). The bill, which was co-sponsored by Sen. Nelson, would provide assistance to homeowners affected by toxic Chinese-made drywall.

In July, Sen. Landrieu sent a letter to the SBA requesting a review of their authority to provide assistance to homeowners with defective drywall. In October, the SBA responded that under the current law the agency did not have the authority to provide assistance for this type of disaster. S. 2731 would authorize the SBA to provide homeowner assistance for the repair or replacement of defective drywall in areas declared a disaster by a Governor.


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