Need Post-Disaster Home Repair? Avoid Contractor Fraud
How to sniff out scammers who use disasters to swindle homeowners
Consumer agencies have issued repeated warnings about roving disaster chasers who offer to replace or repair roofs, chimneys, walls and anything else that may have been wrecked in a storm or other calamity.
“If your home or property has been damaged, beware of bogus home improvement contractors who may be looking to prey on your situation and swindle you into paying for shoddy, overpriced or unneeded work,” said a warning issued by Illinois Attorney General Lisa Madigan in July, following flooding, severe thunderstorms and tornadoes in that state.
In April, Madigan filed lawsuits against multiple home improvement contractors she said cheated homeowners out of more than $220,000, in part by targeting communities that suffered severe storms. One company, she said, further damaged customers’ homes in an attempt to drive up storm-related insurance payments. She claimed another failed to complete promised work despite taking insurance checks and other forms of payment. Some homeowners who paid in full ended up facing liens from subcontractors the company stiffed as well, the attorney general said.
Officials in California went house to house in 2014 to warn owners of homes damaged by wildfires to be on guard against scammers.
You may be a disaster victim, but don’t become a fraud victim, too. Here are 10 ways to avoid it.
1. Beware of any contractor that contacts you, especially one that shows up on your doorstep. Don’t let the person into your home to do a “free” inspection or for any other reason, according to Colorado Attorney General Cynthia H. Coffman.
2 Get recommendations from friends, relatives or coworkers, Madigan wrote in her press release. Avoid using newspaper ads, online listings or the phone book to find a contractor to repair your home.
3. Check with your state or local consumer agency for complaints or government actions against the company and to verify the contractor has met licensing and registration requirements. Some states, including Connecticut, Massachusetts and Maryland, have set up so-called home improvement guaranty funds that in certain circumstances reimburse homeowners who are victimized by a home improvement contractor. But to be eligible, you must use a registered or licensed contractor.
4. Look for a Better Business Bureau (BBB) report on the contractor. The company should have a BBB grade of at least a B, the minimum required for accreditation.But don’t rely on the grade alone. Read any complaints, and try a web search using the company name and terms like “reviews” and “complaints.”
5. Expect professionalism. Be wary if the contractor pressures you to act right away, uses scare tactics (they may say the home has a hazardous condition) or refuses to put details in writing.
6. Get several estimates, even if you’re in a rush to get repairs done. It will help protect you from being priced gouged. Keep in mind the lowest price may not be the best deal. Scammers may offer a substantial discount, saying they just happen to be in the area and have material left over from another job, according to the office of the Indiana Attorney General.
7. Know your state law. Some states give consumers a certain period, usually three days, to cancel a home improvement contract.
8. Read the contract carefully and keep a signed copy. Ask about anything you don’t understand, and get the answers in writing. Don’t rely on verbal agreements.
9. Don’t pay in full until you’re happy with the work. Also, if a contractor requests a large down payment, it could be a sign the company is financial trouble. The office of the Indiana Attorney General says the down payment should be no more than one third of the total cost.