Some warning signs to look out for include unsolicited contractors showing up at your door saying they're “in the neighborhood” and asking for full payment in cash. Scammers are often looking for older homeowners, believing that they are more trusting, richer, and more likely to have cognitive or memory problems. If you ever receive a random phone call or a random knock on the door from a person claiming to be a contractor, be careful. They may not be who they say they are. They may require money in advance in the form of a cash deposit, or a local address may be missing (stay away from P, O.
And certainly, if your vehicle doesn't bear your name or company name, it's likely that they lack legitimacy). Be sure to do your research online before handing over any type of payment to these potential contractors. Never pay for the entire project for in advance. Some contractors may want a portion of the money to start the work, but it should only be a small deposit.
Make the final payment only after completing the work. If you can, pay with a credit card because they come with fraud protection. Read all documents carefully before signing them. Scammers will try to get you to sign a contract by calling it a budget or press release just to get an idea. And don't sign a contract with blank spaces.
Suspicious contractors will fill in spaces later on with higher costs or with jobs other than what you wanted. A contractor who resists when you ask to see their professional and insurance license or certification is a big warning sign. Depending on state and local regulations, as well as the scope of your project, your contractor may or may not be legally required to have a contractor's license, but you should definitely have insurance. Some contractors include materials in their fixed rate, while others bill them at the end of the job, but whatever structure you decide, it must be clearly stipulated in your contract.
Professionals understand that you're most likely “looking for contractors” and getting quotes from several companies. It is illegal for a contractor to offer not to pay an insurance deductible or to include the amount of the deductible in a offer. Organizations such as the Better Business Bureau have made it difficult for these scammers to take advantage of informed consumers, but some fraudulent contractors continue to target vulnerable groups, such as the elderly, going door to door. According to the NAHB, if a contractor asks you to obtain your own permit, which is legally required in most states and municipalities, depending on the scope of the work, it's a sure sign that you are not a legitimate contractor.
This category also includes economic offers where the contractor intentionally quotes a price much lower than the current price for similar work and then adds additional prices that may result in the final cost being much higher than the initial estimate. Contractor fraud refers to illegal business practices committed by individual contractors or companies contracted to renovate, repair, or (re) build residential properties. And while complaints against contractors for unprofessional practices and scams continue to feature prominently, that doesn't mean that all contractors are bad. After a hurricane or tornado, cities are often teeming with roofing companies, and sadly, some of them mislead homeowners.
According to the Federal Trade Commission (FTC), a contractor who wants you to pay a deposit right away, or who says they're going to make a special offer for a limited time, is an important warning sign of a scam. While most contractors are honest people, there are some fraudulent ones who seek to take advantage of homeowners. While there are fraudulent contractors who do a poor job or who don't even show up, taking some precautions and carrying out basic due diligence can minimize the risk of fraud on the part of contractors. Fraud by a contractor often ends up costing the victim twice as much, since, in addition to losing a significant amount to the scammer, whose inferior work can cause damage to previously undamaged parts of a home, it may also be necessary to pay a legitimate company to meet work quality standards or repair damage.
Another common trick is for the contractor to supposedly encounter significant and unforeseen problems, such as damage from hidden water or termites, once the work is already under way. Most consumers who filed complaints against their contractor mentioned poor quality work, jobs that were never finished and the failure to obtain the required permits.
