How to Stay Clear of Home Contractor Fraud

While most contractors are trustworthy, there are still dishonest ones out there who want to rip off homeowners. But if you know how to defend yourself and pick trustworthy professionals, you won't have to become a victim.

Unfortunately, some dishonest contractors out there want to steal your money and give you poor or insufficient homework in exchange. There are a few clear-cut warning signs to watch out for and actions you may take to safeguard yourself from prospective fraudsters and con artists.

Do Your Research and Avoid Making Cold Calls

Beware of a stranger calling themselves a contractor who ever knocks on your door or calls you randomly. Perhaps they are not who they say they are.

They can demand payment in advance in the form of a cash deposit, or maybe they don't have a local address (steer clear of P.O. boxes or hotel addresses). Furthermore, they are undoubtedly unreliable if their car does not bear their identity or business name.

Before sending money to these would-be contractors, do some web research.

Consult Your Insurance Provider (Or Speak With an Experienced Lawyer)

Make sure your homeowner's insurance will cover the work. Your insurance provider might send an adjuster to assess the damage and determine the necessary repairs and how much they will cost.

Ask your adjuster to look at damage estimates or contracts you may have already received. Remember that the insurance provider will only cover claims that the adjuster approves.

Request Written Quotes

Never sign a contract before receiving a written estimate detailing all repairs, costs, labor charges, and material costs. Your estimate must be on business letterhead with your contact information visible.

Also, free should be estimated. Avoid contractors who want payment upfront for their estimates, and be sure to receive many quotes.

Never Pay In Advance

Never pay for a project in full advance. Although some contractors could require a small deposit to begin the work, this should only be the case occasionally. After the job is finished, only make the final payment. If you can, use a credit card to make your purchase because they have fraud insurance. Never pay with cash.

Verify Their Insurance and Licenses

Request to see any local or state licenses. A license should have a number; note it down and then contact the relevant licensing body to confirm that it is valid.

Obtain A Written Agreement

To prevent a con artist from filling in the blanks later, make sure the contract you get is correctly filled out with no gaps. Don't sign a contract if you don't comprehend the language or if it is vague or open-ended.

Examine your contractor's work once they've completed the project. Ask that any discrepancies between it and your contract be resolved.

Seek assistance if you believe you are working with a dishonest contractor. You can get in touch with the Better Business Bureau, your state's insurance commissioner, your state's consumer protection office, the police, or the insurance fraud office in your state.