A reader recently called our attention to an interesting problem. He is an HVAC contractor. He provides price quotations to property owners for the replacement and installation of complete systems. The property owner intends to finance this major improvement and approaches a lending institution. The loan officer informs the owner that at least two bids are required before a loan can be approved. The loan officer provides the property owner with the name and contact information of another HVAC contractor.
The reader reports that almost without fail, the competing HVAC contractor undercuts his bid slightly and is awarded the contract. The reader strongly suspects that the loan officer is providing the favored contractor with the original price quotation. The reader wonders if he has any legal recourse.
Our initial response was that the loan officer’s conduct was certainly unethical and possibly legally actionable. There is civil tort liability for interfering with a contractual relationship. And if the loan officer has been receiving reciprocal favors from his favored HVAC contractor, the conduct may be criminal. A lender’s requirement for more than one bid is reasonable, but there are ways to accomplish that without engaging in collusive business practices.
I'd like to hear if you have encountered similar problems. If so, what has been your response? Please feel free to comment below.