Home improvement scams are more common than you might think. If you're feeling uncertain about your contractor, it's crucial to identify the tactics scammers use to defraud homeowners.
After spending so much time at home, many of us are eager to enhance our living spaces. While there are plenty of trustworthy contractors available, a significant number of homeowners fall prey to dishonest individuals each year. According to the Better Business Bureau's 2020 Scam Tracker Risk Report, home repair scams rank among the top five most reported frauds in the U.S. and Canada.
Before you start major renovations, it's vital to spot the signs of a scam, says Danny Lipford, host of a popular home improvement TV and radio show. Here are some red flags to be aware of:
They unexpectedly appear at your doorstep claiming they were in the vicinity
Reliable contractors usually don't go door-to-door. If someone knocks on your door, especially after a storm has damaged homes nearby, be cautious. Accept their business card but inform them you'll verify their references before making any decisions.
They pressure you for an immediate answer
Reputable contractors will likely have a busy schedule and encourage you to take your time deciding on project specifics. Avoid anyone who insists you agree to their terms right away.
They require full payment upfront or only accept cash
Never pay the entire project cost before work begins. Some states even limit the amount a contractor can request as a down payment. Check your local consumer agency for regulations in your area. Final payments should only be made when you're satisfied with the completed work.
They use inferior materials not specified in your contract
Some unscrupulous contractors might substitute low-quality materials for what's outlined in your contract. For instance, they may replace 5/8-inch plywood with 3/8-inch or provide a 2-inch gravel layer instead of the agreed 4-inch. This allows them to pocket the difference.
They want to use leftover materials from other projects
A contractor suggesting to use leftover materials should raise immediate concerns. Such materials could be stolen or of questionable quality, which typically means no warranty or recourse if they fail.
They cannot provide proof of licensing or insurance
Regardless of the difficulty in finding a contractor willing to work, you should avoid anyone who cannot show a valid license or proof of insurance. If they refuse, it's time to move on.
They offer an estimate significantly lower than competitors
Be cautious of bids that are much lower than others. For instance, if two estimates are around $5,000 and another is $3,200, the low bidder may be either inexperienced or planning to charge extra later. Another common scam involves underbidding and then inflating material costs.
Ensuring your contractor is trustworthy
Word of mouth can be a valuable resource for finding reliable contractors. Ask friends for recommendations and consult your local home builders association for any complaints against potential hires. Always request multiple estimates and check references from both recent and older projects to gauge quality. Even if your state doesn't require a written agreement, it's wise to request one.
To protect yourself during renovations, keep detailed notes on progress and any issues that arise. Taking photos at various stages can also help clarify whether work meets agreed standards once the project is complete. If you suspect you've been scammed, report it to the Better Business Bureau, your local building inspector, and your state attorney general.
