Note from the hosts:  As writer Matt Herndon puts it, “Home improvement scams are pretty prevalent. Unfortunately, they’re even worse post-disaster.”  Referring of course to the aftermath of Sandy (and I guess recent storms hitting the west coast).  Hope it helps. ~jb


Avoiding Home Improvement Scams :: Man Working on Roofs in Louisiana

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Many home improvements call for professional contractors to make sure the job is handled properly. But finding a qualified contractor isn’t as easy as it looks. In addition to weeding out the good contractors from the bad, consumers also need to be wary of criminals that use contracting work as a front to scam unsuspecting homeowners.

These scams are so prevalent that the Federal Trade Commission has released guidelines to help homeowners identify potential scam artists. If you are looking to hire a professional to oversee an upgrade or renovation to your home, your approach in choosing a contractor can greatly reduce your risk of being victimized. Here are some guidelines to help protect yourself by avoiding home improvement scams:

Know the Warning Signs

Scammers are opportunists and tend to target people who they believe may be more easily duped. Fortunately for consumers, there are a number of tells that can signal a potential scam artist posing as a contractor. The first giveaway is a lack of credentials, including business addresses and past clientele.  A scamming contractor will also lack a valid license or contractor insurance. In many cases, he will try to urge you to sign the contract that day rather than wait and mull over the offer.  (Check AllState Insurance‘s Beware of Home Improvement Scams & NARI‘s Top Ten Signs a Contractor is Untrustworthy.)

Contractors are legally required to issue your “Right of Recession” in writing, which gives you permission to cancel the contract within three days of signing it. A scamming contractor won’t even mention this, which is a dead giveaway that you’re dealing with a shady character.

Do Your Research

As is the case whenever you hire a professional to do work for you, a little research goes a long way. Check out online reviews to get a sense of whether previous customers were satisfied with the contractor’s work, and check with the Better Business Bureau to determine whether anyone has filed a complaint against the contractor. For contractors with a limited work history, ask for names and phone numbers of references.

Men Working on a Home Garage and Driveway

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If you’re uncertain of anything regarding the contracting process, don’t be shy about asking the contractor additional questions. While a scammer is likely to get frustrated quickly, a good contractor won’t make you feel bad for wanting more information.

Dictate the Terms

Even if you’re confident in the trustworthiness of a prospective contractor, it doesn’t hurt to make sure certain terms and conditions are in place. First, make sure you both sign a contract that clearly outlines the expectations on both sides. When it comes to up-front payments, don’t fork over more than 25 to 33 percent of the overall value of the project. And if you feel like you’re being pressured or rushed into signing the agreement, take a step back and mull it over. In many cases, the pressure to sign can be a red flag that someone is trying to scam you.

If you do end up getting scammed by a contractor, you can file a complaint with the FTC to try to bring the criminal to justice. Unfortunately, there are no guarantees that you will ever be compensated for the hardships you endure as a result of being victimized. That’s why it is of utmost importance that you take steps to protect yourself from being scammed in the first place.


For more info, author Matt also recommends checking out the FTC’s page Home Sweet Home Improvement for every thing you need to know about both avoiding a scam and following up if you suspect you are being scammed.

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