Homeowners: Beware of These Five Types of Construction Fraud
When warm weather arrives, so do crooked contractors who want to steal from homeowners. They provide bogus repairs that are not even necessary. In some cases, no work at all is done after they receive an initial payment.
While most contractors out there are honest, it is usually the ones who go from door to door offering help who are untrustworthy. Good contractors do not need to solicit work in this manner.
People knocking on doors usually say they walked by and happened to notice something wrong. They may offer to get the house ready for storm season. If there was a recent storm, they may simply show up and offer to fix something that is clearly damaged.
When falling victim to these scams, homeowners could lose thousands of dollars. In addition to this, the ensuing headaches from paying even more for real repairs or trying to recover money from a con artist complicate the situation. If the homeowner’s insurance does not cover fraudulent repairs, they may never recover the money.
The five worst scams these crooks pull off include the following:
1. Poor work quality — Con artists often use cheap materials if they do any repairs. The work is low quality, and homeowners usually must pay to have the repairs redone.
2. Prepayment — In this type of scam, the contractor asks for a large sum of money upfront. After receiving the funds, they disappear or do very little work.
3. Inflated damage — To increase billable expenses, contractors performing this type of scam may make holes in roofs larger. They may also inflate bills for work that was not done.
4. Phantom damage — In this type of scam, the contractor says there is storm damage when there is none. A dishonest individual may destruct sidewalls or roofs to create damage and then repair it.
5. Deductible payment — Some contractors offer to pay the homeowner’s deductible to gain business. However, this is always a plot to lure homeowners into fraudulent work.
How to avoid scams
Verify a contractor’s license — Most scammers are not licensed. Check with local and state licensing agencies for proper verification procedures.
Avoid door-to-door contractors — Good contractors are usually too busy to go door to door seeking work. Those who offer services in this manner are often desperate for money.
Contact the Better Business Bureau — Search for the contractor on the BBB website or call to ask about complaints. Avoid people with a sketchy history. You can also check Angi.
Demand a contract — Do not sign a contract with blank spaces. Make sure the contract specifies the work to be done, the repair schedule and the detailed prices.
Watch for red flags — Many con artists don’t have references or business cards. They may also be hesitant to give an address. If they do provide one, it is usually a post office box rather than a street address.
Deal with your insurer directly — Do not let a contractor talk to the insurance company alone. It is much better to work directly with the insurer which will survey the damage and decide what repairs are necessary. It is also crucial to have the repairs done by a reputable professional for the work to be covered by the insurance company.
