Contractor/home repair scams: Beware of the “fast” and “cheap”!
Let’s imagine that you’re a homeowner who wants to add a deck to an upper floor. You contact a few construction/remodeling companies and find their estimates exceed your budget. So you decide to “go cheap” and peruse listings in Craigslist or Nextdoor. You communicate with someone who quotes an amenable figure and promises to do the work in record time. However, there’s a condition for the low estimate: the contractor demands that the estimate amount be paid in full, upfront and in cash. They’re counting on your desire to have the project done quickly and at low cost.
After paying the purported contractor the full balance (and in cash), they begin the work but the quality turns out to be substandard, and they’ve been taking too long to complete the project. You demand a refund for the unfinished work. Your calls and emails go unanswered. Unfortunately, you made payment in cash and have no written contract, nor written estimate. After doing the research you should have done in the first place, you discover that the so-called “contractor” doesn’t even have a contractor’s license, nor insurance. Small claims court isn’t even an option at this point. You’ve become the victim of a contractor/home repair scam.
Contractor/home repair/service scams are nothing new and have been circulating for decades. However, with the economy as it is, these scams are becoming more and more common. Of course there are independent contractors and persons offering home repairs who are honest and reputable, but you cannot assume that they all fit that mold without performing some initial due diligence. Keep your guard up and don’t allow anyone to pressure you into acting quickly on the “deal” they are offering you.
Know the Warning Signs
• Unsolicited Door-to-Door Visits: Legitimate, reputable contractors usually have a backlog of work and rarely solicit jobs door-to-door. If you want to consider someone who leaves a flyer at your door, check first to see if they are licensed and also use a search engine to find any online reviews of their work. Maybe even ask your neighbors if they have hired them.
• “Leftover Materials” Pitch: Scammers may claim they just finished a job nearby and have discounted extra asphalt, roofing, or paving materials. They may offer you a discount for use of these materials, but will demand payment for these leftover materials upfront, and in cash.
• High-Pressure Tactics: Beware of anyone who demands an immediate decision or tries to scare you by claiming your home is in imminent danger. This is when it’s time to seek other opinions regarding the work you need done.
• Cash-Only Deals: Be extremely cautious of contractors who refuse checks, demand cash, or ask for payment via digital apps for large, upfront costs. This is probably the biggest red flag of all. These are all payment methods that leave few trails, if any at all. The offer of a cash discount may sound tempting, but don’t fall for it.
Perform Your Due Diligence
• Verify Licensing: Always hire state-licensed contractors. You can visit your state’s Contractors State License Board website to look up contractor license numbers.
• Get Multiple Written Bids: Aim to get at least three estimates from established businesses on company letterhead. Be highly suspicious of bids that are drastically lower than the others.
• Never Pay in Full Upfront: Reputable businesses may require a deposit to secure materials, but it should generally not exceed 10% of the total cost or $1,000, whichever is less.
• Require a Detailed Contract: Ensure the contract includes the exact scope of work, a payment schedule tied to project milestones, start and completion dates, and all warranty terms. Never sign a contract with blank spaces.
• Check Reviews and References: Look up the company on the Better Business Bureau and ask for recent references you can contact or visit.
More Information on Contractor Scams
Beware of these contractor scams as spring project season begins
From kitchen remodels to landscaping and even gutter cleaning, homeowners often use the warmer months to tackle long‑planned home projects, but the Better Business Bureau warns the ramp‑up in hiring contractors also marks the start of “spring scam season.”
“We see an influx in people hiring contractors or hiring home service businesses,” said Meghan Conradt, director of foundation with the Better Business Bureau. “And unfortunately, sometimes we’ll also see an influx in complaints or experiences that aren’t great with hiring professionals to work on your home.”
How to Hire Reliable Home-Repair and Remodeling Contractors
If you are a homeowner, you may have experienced someone showing up at your door offering to do work for you. They might say they happened to be driving by and noticed a problem with your roof.
If you agree to let them take a look, they might say it’s an emergency and needs to be fixed immediately. “They take their tools up to the attic or crawl space under your roof and bang their hammers around…but [don’t really] do anything,” says Andy Apter, president of the National Association of the Remodeling Industry who also owns his own construction business in Annapolis, Maryland.
What Is a Home Improvement Scam? Learn 8 Warning Signs
The red flags were there—but Dan and Lydia Cox didn’t notice them at first. After all, the Boston contractor they hired had a polished-looking website and great customer reviews.
That confidence would cost them dearly. In the end, as reported by NBC Boston, the couple was out $6,000 for a job that was never finished—plus $50,000 in damage to their home’s foundation.
Don’t Get Scammed: Find a Qualified Contractor
There are thousands of legitimate, ethical contractors in business around the country. Unfortunately, there are also scam artists looking to cheat you out of your money who pose as legitimate contractors. These “fly-by-night” operators often show up in communities impacted by natural disasters to try to scam distressed home owners into paying for shoddy repairs or work that they will never show up to perform.
How To Avoid a Home Improvement Scam
Adding a room, renovating a basement, or doing some much-needed repairs around your home can be a big undertaking. Finding a trustworthy contractor is an important first step. Scammers will promise to do the work, but leave you and your home worse off than when you started. They may do shoddy work, damage your home, overcharge you, or just take your money without performing any services. So how do you tell the difference between a trustworthy contractor and a scammer? Before you hire a contractor, learn how to recognize the signs of a home improvement scam.
