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Old scam about insulation rebates resurfaces

A string of consumer calls to the Minnesota Department of Commerce's Energy Information Center have exposed an old, but active rebate scam. The scam, which the Commerce Department warned consumers about last year, allegedly involves insulation contractors affiliated with Idaho-based Rocky Mountain Insulation, Corp. Commerce Commissioner Mike Rothman warned Minnesotans again today to be wary of door-to-door contractors pitching their services, and then taking away the rights to homeowner rebates.

"Before you sign on the dotted line or give anyone a nickel, you should ask questions first," said Commerce Commissioner Mike Rothman. "Do not be pressured to sign away your rebate rights on the spot. Instead, learn more about the rebate program and your rights as a consumer by contacting your utility company or the Minnesota Department of Commerce."

According to several complaints, contractors affiliated with Rocky Mountain Insulation have allegedly been approaching consumers to solicit and inform them of insulation rebates offered by Minnesota Energy Resources Co. (MERC) C a natural gas utility serving more than 211,000 customers in Minnesota. Customers are then asked by the contractors to sign over their utility rebate to Rocky Mountain, with claims that they will receive their rebate faster through a "discount" to the cost of the installation.

In other instances, contractors with Rocky Mountain have allegedly identified themselves as MERC employees when pitching their services to potential customers.

The Minnesota Department of Commerce encourages all Minnesota consumers to take the following steps before hiring a contractor or signing over your rebate to a door-to-door salesman.

1. Know Who You Are Dealing With C Ask questions and make sure the contractor is properly licensed with the Minnesota Department of Labor and Industry (DOLI) by checking the state's searchable database or by calling (651) 284-5069.

2. Understand the Rebate Program C Call your utility to get a better understanding of the rebate being offered, how the rebate works, and what your rights are as a customer.

3. Shop Around C Don't just settle for the first contractor who arrives at your doorstep. Get at least three bids for service before hiring a contractor. This will save you money and help ensure you get the best deal for the service being provided.

4. Take Advantage of the 72-Hour Cooling Off Law C You have the right to cancel a contract for work in your home within 72-hours of signing. Do not provide a check or down-payment until this period has ended, and take that time to check references and evaluate the contract carefully. Learn more at the Minnesota Attorney General's Office .

5. Call the Department of Commerce C Call our Energy Information Center with any questions you have about insulation rebate programs, or other energy efficiency services provided by contractors. Our experts can help you make an informed decision. Our staff can be reached at (651) 296-5175 or toll-free at (800) 657-3710 or via e-mail at

"It never hurts to ask questions or do some quick research," said Rothman. "Prior to purchasing services from any one contractor, the Minnesota Department of Commerce highly recommends that consumers first ask questions, and then obtain at least three bids for service. Consumers also should carefully inspect forms for any rebate they intend to apply for to ensure they are familiar with all requirements."

In the case of MERC rebates, Commissioner Rothman warns that consumers should be aware that the utility does not allow contractors to receive rebates on behalf of a MERC customer. Rebates will be paid only to the person on the invoice/receipt and that person must match the name on the MER account or be listed as the property owner in the event of a landlord, the utility says.

"Minnesota Energy Resources (MERC) has not contracted with any contractor to inform our customers about our insulation rebates while selling their services door-to-door," the utility said in a statement issued on its website. "Although a contractor may provide rebate information to customers, we have not authorized any insulation contractor to state they represent MERC."