By Christopher Walker Home improvement is one of the top sources for consumer complaints. That's according to 70% of consumer protection agencies that responded to a survey from the National Association of Consumer Agency Administrators (NACAA) and the Consumer Federation of America. Only auto sales and household goods appeared on more top five lists.

"It's always in the top three," NACAA executive director Wendy Weinberg says, referring to the home remodeling industry. "It vacillates from third to first, but it's always there."

The survey also found that home improvement companies are more likely to go out of business and reopen under a different name than are companies in any other industry.

"I don't think it's a fair reflection on the true remodeling contractors of this country," says NARI president Tony LaPelusa, explaining that practically anyone with a phone and a hammer can call himself a home remodeling contractor. "If someone calls and complains because they gave the guy next door $200 to build their stairs and they haven't seen him since, is it fair to call that a complaint against the home remodeling industry? I don't think so."

In its report, the NACAA recommends state licensing and bonding requirements for contractors to help alleviate the problem. Twenty states currently require licensing for remodeling contractors, while another 11 require registration, according to an AARP Research Center report.

"I am totally in favor of licensing," LaPelusa says, "but only if they can enforce it." Licensing without adequate enforcement would burden legitimate contractors and have no affect on "the guys this survey is talking about," according to LaPelusa.

The top categories of businesses generating complaints to consumer protection agencies in 2000

Rank Category % of Agencies Reporting the Category Among their Top 5
1 Auto Sales 73
1 Household Goods 73
3 Home Improvement 70
4 Auto Repair 65
5 Credit/Lending 55
6 Collection 25
7 Utilities 20
8 Internet 15
8 Landlord-Tenant 15
8 Mail Order 15
8 Telemarketing 15

The top types of businesses most likely to go out of business and reopen under a different name:

1. Home Repair Contractors

2. Furniture Stores

3. Health Studios